TMI Blog2018 (2) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... x returns filed by the said dealer along with bank statements, which prima facie shows that the selling dealer has remitted the collected tax from the assessee. The assessee has utilized the goods purchased from the selling dealers for the manufacture of goods and effected local and interstate sales. It is trite that the revenue can be at a loss in allowing the input tax credit to a dealer, who deals with a bogus transaction, for example, a selling dealer who is not in existence or a deregistered dealer, in such circumstances, it is not in doubt that unless the purchasing dealer establishes the genuineness of the invoices issued by the selling dealer, no input tax credit can be allowed but that is not the case in the present set of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, etc. for use in the course of its business. In respect of the said purchases, the selling dealers raised tax invoices as prescribed under Section 29 of the Act on the petitioner and it was contended by the assessee that the applicable tax amount was collected by the selling dealers under the provisions of the Act on such sales. It was the contention of the petitioner that those goods purchased by it were used in the manufacture of goods and both local and interstate sales of goods of the manufactured goods were effected. Accordingly, input tax credit claim was made by the assessee for the tax periods in question. The Assessing Officer invoking the provisions of Section 39(1) of the Act proposed to disallow the input tax credit amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has failed to file the sales tax returns and discharge its sales tax liability. Denial of input tax credit is not supported by any statutory provision and is contrary to the provisions of the Act. It is contended that input tax credit was supported by valid tax invoices raised by the selling dealers in accordance with the provisions of Section 29 of the Act, the petitioner is entitled to claim input tax credit based on the invoices raised by the selling dealers, the same having been used in the manufacture of goods and being effected with sales both locally and interstate. It is contended that the Assessing Officer while passing the reassessment order has observed that tax invoices are genuine, however, denied the input tax credit only f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel seeks to set aside the order impugned herein, by allowing the revision petition. 6. Learned AGA appearing for the respondent would emphasize that the burden lies on the assessee to prove that the tax collected was deposited by the selling dealers to the Government. Reliance is placed on Section 70 of the Act to contend that, for the purposes of any claim to input tax under the Act, the burden of proving that any transaction of a dealer is not liable to tax, or any claim to deduction of input tax is correct, shall lie on such dealer. It is pointed out that in pursuance of the directions issued by this Court, the department has examined the matter in detail and on verification it was found that some of the selling dealers had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally admitted that in respect of selling dealer Nos.1 to 3, assessee is entitled to the input tax credit; as regards the selling dealer No.7 is concerned, now the assessee has filed the income tax returns filed by the said dealer along with bank statements, which prima facie shows that the selling dealer has remitted the collected tax from the assessee. The assessee has utilized the goods purchased from the selling dealers for the manufacture of goods and effected local and interstate sales. 9. The Tribunal mainly relied upon the judgment of this Court in the case of State of Karnataka Vs. Centum Industries Private Limited, Bangalore [2014 (80) Kar.L.J.65] to confirm the orders of the authorities. The said judgment of Centum (supra) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is trite that the revenue can be at a loss in allowing the input tax credit to a dealer, who deals with a bogus transaction, for example, a selling dealer who is not in existence or a deregistered dealer, in such circumstances, it is not in doubt that unless the purchasing dealer establishes the genuineness of the invoices issued by the selling dealer, no input tax credit can be allowed but that is not the case in the present set of facts. The Assessing Officer while passing reassessment order has categorically observed that the invoices are genuine and in view of the material placed before this Court with respect to the selling dealer No.7, the matter requires reconsideration by the Assessing Officer. Even as regards the selling dealer N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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