Bogus dealer claims and Input Tax Credit: mere invoices do not prove genuine purchases or defeat reassessment.

Where the Revenue shows that the selling dealer is bogus or non-existent and the assessment record reflects an opportunity to be heard, the burden shifts to the purchasing dealer to prove the genuineness of the transaction and entitlement to Input Tax Credit. Mere invoices, e-sugam details, bank entries, or ledger accounts do not, by themselves, establish actual movement of goods or a valid ITC claim. On those facts, the Court found no breach of natural justice and held that the reassessment could not be interfered with in writ jurisdiction; the disallowance of Input Tax Credit was sustained.

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Issues: Whether the reassessment disallowing Input Tax Credit on purchases said to be made from a bogus dealer was vitiated for breach of natural justice, and whether the writ petition was maintainable to challenge such reassessment.

Analysis: The proposition notice specifically referred to the proposed disallowance of Input Tax Credit and the allegation that the selling dealer was bogus and had not filed returns. The Revenue also placed material showing that the dealer was found to be non-existent and that the petitioner had been given an opportunity in the assessment proceedings. In such cases, the Court held that once the Revenue establishes a prima facie case that the selling dealer is a paper entity and the alleged sales are unsupported by actual movement of goods, the burden shifts to the purchasing dealer to dispel the suspicion and to substantiate the claim. Mere production of invoices, e-sugam details, bank entries, or ledger accounts does not by itself establish a genuine sale or entitlement to Input Tax Credit. On those facts, there was no breach of natural justice and the assessment could not be interdicted in writ jurisdiction.

Conclusion: The challenge to the reassessment failed; the petitioner was not entitled to relief and the disallowance of Input Tax Credit was sustained.

Final Conclusion: The writ petition was misconceived and stood dismissed, leaving the reassessment and denial of Input Tax Credit undisturbed.

Ratio Decidendi: Where the Revenue produces material showing that the selling dealer is bogus or non-existent and the assessment record reflects opportunity to the assessee, the assessee must positively prove the genuineness of the transaction and entitlement to Input Tax Credit; otherwise, mere invoices and allied documents do not establish a valid claim or a breach of natural justice.

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