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Shyam Oil Mill Versus State of Gujarat

2015 (8) TMI 793 - GUJARAT HIGH COURT

Denial of Input tax credit – Appellant claimed Input Tax Credit on alleged purchases made however AO denied Credit on ground that registration certificate dealer was cancelled ab initio as it was found that said dealer indulged into billing activities only – Tribunal disallowed input tax credit of tax paid on purchases without verifying genuineness of transactions –Held that:- it was not in dispute that when Assessing Officer passed order disallowing Input Tax Credit claimed by appellant, appell .....

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after giving opportunity to appellant afresh in accordance with law – Decided in favour or Assesse. - Tax Appeal No. 411 of 2014, Civil Application (OJ) No. 280 of 2014 - Dated:- 30-4-2015 - M. R. Shah And S. H. Vora, JJ. For the Appellant : Mr Uchit N Sheth, Adv. For the Respondent : Mr Chintan Dave, Asstt. Govt Pleader JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) [1.0] Feeling aggrieved and dissatisfied with the impugned judgment and order dated 24.10.2013 passed by the learned Gujarat V .....

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facts and circumstances of the case Hon ble Tribunal is justified in disposing the second appeal on merits even when the learned first appellate authority had summarily rejected the first appeal on the ground of non payment of predeposit? (B) Whether in the facts and circumstances of the case Hon ble Tribunal is justified in disallowing input tax credit of tax paid on purchases made from M/s. Dev Enterprise without verifying the genuineness of the transactions?" [2.0] Facts leading to the .....

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he appellant from M/s. Dev Enterprise. That the Assessing Officer denied the said Input Tax Credit claimed on the purchase made by the appellant from M/s. Dev Enterprise on the ground that the registration certificate of M/s. Dev Enterprise from whom the appellant is alleged to have purchased the goods, has been cancelled ab initio as it was found that the said M/s. Dev Enterprise indulged into billing activities only. That an assessment order came to be passed by the Assessing Officer raising t .....

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ggrieved and dissatisfied with the assessment order passed by the Assessing Officer raising the aforesaid demand and denying and disallowing the Input Tax Credit of ₹ 96,268/- on the alleged purchases made by the appellant from M/s. Dev Enterprise, the appellant herein preferred the appeal before the first Appellate Authority. That the first Appellate Authority passed an order directing the appellant to deposit a sum of ₹ 80,000/- by way of predeposit. That the appellant failed to ma .....

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nt, claimed on the alleged purchases made by the appellant from M/s. Dev Enterprise, the appellant preferred appeal before the learned Tribunal and by impugned judgment and order, the learned Tribunal has dismissed the said appeal confirming the order passed by the Assessing Officer disallowing the Input Tax Credit claimed by the appellant on alleged purchases made by the appellant from M/s. Dev Enterprise. [2.4] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by t .....

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ned Tribunal ought not to have decided the issue on merits, however submitted that now the second question of law i.e. whether the learned Tribunal is right in law and on facts in confirming the order passed by the Assessing Officer disallowing the Input Tax Credit claimed by the appellant on the purchases made by the appellant from M/s. Dev Enterprise is concerned, it is submitted that now the said issue/question is squarely covered by the decision dated 26.03.2015 of the Division Bench of this .....

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ctions or not. It is submitted that in the present case also, the learned Assessing Officer and even the learned Tribunal denied the Input Tax Credit to the appellant on the purchases made by the appellant from M/s. Dev Enterprise solely on the ground that the registration certificate in the case of M/s. Dev Enterprise has been canceled ab initio as it was found that M/s. Dev Enterprise was doing billing activities only and neither there was any sale by M/s. Dev Enterprise nor any movement of go .....

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r de novo adjudication. [4.0] Shri Chintan Dave, learned AGP appearing on behalf of the respondent initially tried to oppose the present Tax Appeal, however is not in a position and is not disputing that now Question No.(B) raised in the present Tax Appeal would be squarely covered by the decision of this Court in the case of Shree Bhairav Metal Corporation (Supra) and in view of that the matter is to be remanded to the Assessing Officer for afresh adjudication and in light of the observations m .....

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t Tax Credit doubting the transactions of sale between M/s. Dev Enterprise and the appellant. The Assessing Officer disallowed the Input Tax Credit claimed by the appellant on the purchases made by the appellant from M/s. Dev Enterprise on the ground that the registration certificate in the case of M/s. Dev Enterprise came to be canceled ab initio as it was found that the said M/s. Dev Enterprise indulged into billing activities only. However, it is required to be noted that the same order has b .....

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question came to be considered by the Division Bench in the case of Shree Bhairav Metal Corporation (Supra) and dealing with the similar situation the Division Bench of this Court has allowed the said Special Civil Application and remanded the matter to the Assessing Officer to consider the matter / claim of the concerned dealer of Input Tax Credit afresh and in light of the observations made in the said order. Allowing the said Special Civil Application, in paras 9.1 to 10, it is observed, hel .....

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passed by the first revisional authority as well as from the impugned judgment and order passed by the learned Tribunal, it appears and it is not in dispute that the first revisional authority disallowed the ITC of ₹ 6,49,561/- claimed by the petitioner dealer on the purchases alleged to have been made/purchased from M/s Lucky Enterprises on the ground that the registration certificate in the case of M/s Lucky Enterprises has been cancelled ab initio from 22.2.2006 and the transactions/pur .....

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ng activities only and therefore, even the transactions between the petitioner and M/s Lucky Enterprises are also bogus and nongenuine. To some extent, the first revisional authority can be said to be justified in drawing inference and/or in holding so and/or presuming so. However, the petitioner dealer purchaser was required to be served with the order in case of M/s Lucky Enterprises cancelling its registration certificate ab initio and the findings recorded by the appropriate authority in cas .....

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urchaser like the petitioner dealer of the ITC on the purchases made from such seller, whose registration certificate has been cancelled ab initio on the ground that such seller had indulged into billing activities only, is required to be considered. However, an opportunity is required to be given to such dealer/purchaser to prove the genuineness of the transaction and/or to justify its claim of ITC. In the present case, the first revisional authority had disallowed the ITC claimed of ₹ 6, .....

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rved with the copy of the order in the case of M/s Lucky Enterprises cancelling its registration certificate ab initio from 22.2.2006. 9.3 Now, so far as contention of the petitioner that the petitioner produced necessary documentary evidence such as bills, vouchers, weigh bills/slips and the payments were made by cheques and therefore, the first revisional authority ought not have disallowed the ITC is concerned, as such, it cannot be accepted. As held by Division Bench of this Court in case of .....

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required to prove and establish the actual movement of goods from the place of the seller to the place of the purchaser by leading cogent evidence and mere production of the bills, vouchers etc. is not sufficient to claim the ITC. 9.4 As observed earlier, the impugned order has been passed by the adjudicating authority denying the ITC claimed by the petitioner on the alleged purchases made by the petitioner from M/s Lucky Enterprises on the ground that the registration certificate of M/s Lucky E .....

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f the order in the case of M/s Lucky Enterprises. Now, the copy of the order passed in the case of M/s Lucky Enterprises is available with the petitioner. Therefore, after giving an opportunity to the petitioner with respect to observations made in the case of M/s Lucky Enterprises insofar as the alleged transactions between the petitioner and M/s Lucky Enterprises and after giving an opportunity to the petitioner to prove the genuineness of the transaction between the et and M/s Lucky Enterpris .....

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side on the aforesaid ground alone and the matter is required to be remanded to the adjudicating authority to consider the claim of the petitioner of ITC on the alleged purchases made by the petitioner from M/s Lucky Enterprises. 10. In light of the observations made herein above and for the reasons stated above, the petition succeeds in part. The orders passed by the authorities below impugned in the present petition are hereby quashed and set aside and the matter is remitted to the file of the .....

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thin a period of three months from the date of receipt of the present order. It is made clear that the impugned orders are set aside solely on the ground that they were found to be in breach of principles of natural justice, inasmuch as the petitioner dealer was not served with the copy of the order in the case of M/s Lucky Enterprises, the basis of which the ITC has been denied. It is also made clear that this Court has not expressed anything on merits in favour of the petitioner dealer with re .....

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ase of Shree Bhairav Metal Corporation (Supra), the present Tax Appeal is allowed in part. The impugned order passed by the learned Tribunal as well as the Assessing Officer in denying the Input Tax Credit claimed by the appellant on the alleged purchases made by the appellant from M/s. Dev Enterprise are hereby quashed and set aside and the matter is remitted to the file of the adjudicating authority to consider the claim of the appellant for Input Tax Credit claimed on the alleged purchases cl .....

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