Input Tax Credit cannot be denied solely for missing Form 404 where original tax invoices and tax payment proof are available.

Input Tax Credit under the Jharkhand VAT regime could not be denied solely because JVAT Form 404 was not produced when original tax invoices containing the prescribed particulars were available. Section 18(6) of the Jharkhand Value Added Tax Act, 2005 allows credit on the strength of original invoices and permits relaxation for non-production on sufficient cause, so Rule 35(2) could not operate as a mandatory pre-condition to that extent. The authority may still verify the genuineness of the claim and proof of tax payment. Denial of credit merely for absence of Form 404 was unsustainable, and the impugned assessment, reassessment, revision and demand notices were set aside.

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Issues: Whether Input Tax Credit could be denied solely for non-production of JVAT Form 404 despite production of original tax invoices, and whether Rule 35(2) of the Jharkhand Value Added Tax Rules, 2006 was mandatory to that extent.

Analysis: Section 18(6) of the Jharkhand Value Added Tax Act, 2005 permits claim of Input Tax Credit on the strength of original tax invoices containing the prescribed particulars, and also allows relaxation where sufficient reasons exist for non-production of invoices. The requirement of furnishing JVAT Form 404, introduced by Rule 35(2) of the Jharkhand Value Added Tax Rules, 2006, was held to be inconsistent with the parent provision to the extent it made that form a compulsory pre-condition. The claim was therefore required to be examined on the basis of original tax invoices and proof of tax payment, with the authority entitled to verify the genuineness of the claim.

Conclusion: Denial of Input Tax Credit merely for absence of JVAT Form 404 was unsustainable, and the matter was to be re-examined on the basis of original tax invoices. The impugned assessment, reassessment, revision and demand notices were set aside.

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