Input tax credit requires proof of genuine purchases; photocopies alone are insufficient where selling dealers are found to be non-existent.

A dealer claiming input tax credit must prove the genuineness of the purchase transaction and the correctness of the claim; the burden lies on the claimant under the Karnataka VAT framework. Where the assessing record showed that the selling dealers were non-existent or engaged in bill trading, and the assessee produced only photocopies of invoices without books of account or original tax invoices, mere registration details were insufficient. On those facts, the disallowance of input tax credit and the levy of penalty were sustained, and the Tribunal's common judgment was affirmed.

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Issues: Whether input tax credit could be claimed on purchases supported only by photocopies of invoices where the selling dealers were found to be absconding or indulging in bill trading, and whether the burden of proving the correctness of the claim lay on the assessee.

Analysis: The claim arose from reassessment proceedings under Section 39(1) of the Karnataka Value Added Tax Act, 2003, in which the prescribed authority disallowed input tax credit and levied penalty after finding that the selling dealers were absconding and involved in bill trading. The Court noted that no books of account or original tax invoices were produced before the assessing authority despite sufficient opportunity, and that the record contained an inspection report showing that the dealers were non-existing and engaged in bill trading. Referring to Section 70 of the Karnataka Value Added Tax Act, 2003 and earlier binding decisions, the Court reiterated that the burden to prove that the claim to input tax credit is correct lies on the dealer claiming it. Mere possession of registration numbers or photocopies of invoices was held insufficient, especially where the investigation showed that the selling dealers had not remitted tax to the Government.

Conclusion: The assessee failed to discharge the burden of proof, and the disallowance of input tax credit and levy of penalty were sustained.

Final Conclusion: The common judgment of the Tribunal was affirmed, and the revision petitions were dismissed.

Ratio Decidendi: A dealer claiming input tax credit must prove the genuineness of the transaction and the correctness of the claim; where the selling dealers are found to be non-existent or engaged in bill trading, credit cannot be allowed on the basis of photocopies or unsupported invoices, and penalty may follow.

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