TMI Blog2019 (3) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... rima-facie case in their favor - Thus the Tribunal and the first appellate authority were not justified in directing payment of huge amount of pre-deposit for the purpose of admitting the appeal and staying recovery - petition allowed. - R/SPECIAL CIVIL APPLICATION NO. 18963 of 2018 - - - Dated:- 11-2-2019 - MS HARSHA DEVANI AND DR A. P. THAKER, JJ. For The Petitioner (s) : UCHIT N SHETH (7336) For The Respondent (s) : MR UTKARSH SHARMA, ASSISTANT GOVERNMENT PLEADER ORAL JUDGMENT ( PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. By this petition under Article 226 of the Constitution of India, the petitioners have challenged the order dated 6.9.2018 made by the Gujarat Value Added Tax Tribunal (hereinafter referred to as the the Tribunal ) in Second Appeal No.1003 of 2018 as well as the order dated 10.10.2018 passed by the Tribunal whereby the appeal has been dismissed for want of compliance of the order dated 6.9.2018. 2. The first petitioner Capital Traders, a firm registered under the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as the GVAT Act ) is engaged in the business of trading in chemicals. It is the case of the petitioners th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y deposited. It was submitted that out of the three vendors in respect of whom input tax credit came to be disallowed, two of them, namely, M/s.Ardor Global Private Limited and M/s. Infinium De-Chem Private Limited have responded that in fact they do not have any outstanding dues as per the assessment orders passed for the year 2013-14. It was pointed out that insofar as Ardor International Limited is concerned, while the amount of dues is much less than the amount mentioned in the assessment orders of the petitioners, the said vendor has informed the petitioner that majority of such dues are on account of disallowance or exemption from certain high seas sales transactions and that the remaining are dues relating to certain disputed claims of input tax credit unconnected with the sales made to the petitioners. The attention of the court was also drawn to the assessment orders passed in the case of those dealers. 4.1 It was contended that to invoke section 11(7A) of the GVAT Act, the respondents have to establish that qua these sales, the tax has not been paid and such exercise should have been carried out at the stage of the assessment proceedings; however, the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Det-chem Private Limited are concerned, the tax liability dues in the said assessment year is shown as nil. As far as the said contention is concerned, looking to the details it appears to be true at this stage, that these two vendors do not have any dues for the said assessment year 2013-14, however, when the transaction details with reference to ₹ 175.20 crore was called upon from the present petitioner, i.e. Capital Traders, such details were not furnished by the present petitioner and therefore the assessing officer has not release/allowed ITC in transactions of these two vendors and the department has taken utmost care to go into the transaction so that no additional liability is imposed on the present petitioner. The liability in view of the tax dues imposed on the petitioner is to the tune of ₹ 7,81,77,269/- in case of Ardor Global Limited and amount of ₹ 30,9,727/- in case of Infinium Det-chem Private Limited. Mr. Sharma submitted that it was for the petitioners to clarify that the transactions with these three parties were legal and proper and that there were no irregularities or infirmities in these transactions by furnishing the details during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Private Limited during the year 2013-2014, the petitioner has been informed that for the assessment for assessment year 2013-2014 under the GVAT Act has been completed and as per the assessment order, the company has been held liable to pay ₹ 5189/- which has also been deposited by the company in the Government treasury in the month of June, 2016. A copy of the assessment order has also been annexed along with the letter. It is, accordingly, stated that for the year 2013-14, no amount is outstanding as payable by the company under the GVAT Act. 9. By a letter dated 27th November 2018 of Shri Fenil Bharatbhai Shah, Ex-Director of Ardor International Private Limited., the petitioners have been informed that during the year 2013-14 M/s. Ardor International Pvt. Ltd. had sold goods to the petitioners amounting to ₹ 219,43,23,453/-. These sales were recorded in the books of account of the company and duly reported in the returns regularly submitted by the company under the GVAT Act. The tax payable under the GVAT Act as per the returns of the company was also duly paid by the company. It is further stated that the company has been assessed for the year 2013-14 under the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 petitioner and M/s Lucky Enterprises in light of the observations made herein above, therefore, the matter is required to be remanded to the adjudicating authority to consider the claim of the petitioner for ITC on the alleged purchases made by the petitioner from M/s Lucky Enterprises. 12. In the opinion of this court, the above decision would be squarely applicable to the facts of the present case. Having regard to the fact that at the time when the assessment order was made, the petitioners did not have the copies of the assessment orders made in the case of the vendors, the petitioners did not have any opportunity to prove the genuineness of such transactions. 13. As can be seen from the assessment order, the Assessing Officer has placed reliance upon section 11(7A) of the GVAT Act for disallowing input tax credit to the petitioners. Section 11(7A) of the GVAT Act reads as under:- Notwithstanding anything contained in this section, in no case the am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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