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TMI Blog2023 (10) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Tax, Meerut. 4. Brief facts of the case as stated, are that the petitioner being a registered dealer having GSTIN No. 09ACLPU9404D1ZA is engaged in the purchase and sale of waste materials, plastic scrap, paper scrap and metal scrap. The petitioner from April 2018 to September 2019 has disclosed the turnover of Rs. 34,22,634/- on which input tax credit of Rs. 6,16,074.12/- was availed. Thereafter a show cause notice was issued on 23.1.2019 under Section 74 of UP GST Act on the ground of wrong availment of input tax credit to which a reply was submitted by the petitioner. Being not satisfied with the reply of the petitioner, tax liability to the tune of Rs. 6,16,074/- along with penalty of Rs. 6,16,074/- total amount Rs. 12,32,148/- was demanded from the petitioner by the order dated 4.10.2019. Thereafter an appeal has been preferred which has been rejected by the impugned order dated 6.3.2021. Hence the present writ petition. 5. Learned counsel for the petitioner has submitted that petitioner has purchased the goods / scrap from various parties through tax invoices for which e-way bills were also generated. The said goods were transported through trucks along with bilt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any reasonable doubt and establish that actual transaction took place and merely furnishing the details of tax invoices, e-way bills, GR is not sufficient. The petitioner was required to give details i.e. vehicle number which were used for transportation of goods, payment of freight charged, acknowledgement of taking delivery of goods and payment etc. He further submitted that petitioner was required to prove and establish beyond doubt the actual physical movement of goods and genuineness of transportation by furnishing details as referred above and in the event such details are not being furnished, the benefit of input tax credit cannot be accorded. 9. In support of his submissions, he has relied upon the judgement of Hon'ble the Apex Court in the case of State of Karnataka Vs. M/s Ecom Gill Coffee Trading Private Limited (Civil Appeal No. 230 of 2023, decided on 13.03.2023) as well as Patna High Court in M/s Aastha Enterprises Vs. State of Bihar (Civil Writ Jurisdiction Case No. 10395 of 2023) decided on 18.8.2023 in which it has been held that the burden to prove the actual physical movement of the goods is upon the purchasing dealer for availament of input tax credit. He fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.]41; (c) subject to the provisions of [section 41 or section 43A]42, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or installments, the registered person shall be entitled to take credit upon receipt of the last lot or installment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of input tax credit. 13. Further Section 74 of UP GST Act is extracted hereunder:- Section 74: Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts : (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. (2) The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in subsection (10) for issuance of order. (3) Where a notice has been issued for any period unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f erroneous refund. (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded. On perusal of said section, it is clear that determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts empowers to issue notice that tax has not been paid or short paid or erroneously refunded or input tax credit has wrongly been availed or utilized by any reason or wilful misstatement or suppression of fact. Upon adjudication the assessee is required to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. 14. Thus on brief reading of the aforesaid two sections, it is evident that in the event of wrong availment of input tax credit, the proceedings can be initiated against the regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n purchases, such dealer/purchaser shall have to prove and establish the actual physical movement of goods, genuineness of transactions by furnishing the details referred above and mere production of tax invoices would not be sufficient to claim ITC. In fact, the genuineness of the transaction has to be proved as the burden to prove the genuineness of transaction as per section 70 of the KVAT Act, 2003 would be upon the purchasing dealer. At the cost of repetition, it is observed and held that mere production of the invoices and/or payment by cheque is not sufficient and cannot be said to be proving the burden as per section 70 of the Act, 2003. In the said judgement Hon'ble the Apex Court has held that primarily burden of proof for claiming the input tax credit is upon the dealer to furnish the details of selling dealer, vehicle number, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc. to prove and establish the actual physical movement of the goods. Further by submitting tax invoice, e-way bill, GR or payment details is not sufficient. 17. Patna High Court in the case of M/s Astha Enterprises (supra) has held as u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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