2020 (2) TMI 862 - HC - VAT and Sales Tax

High Court overturns order for Input Tax Credit, stresses document verification for authenticity

The High Court of Madras allowed the Revenue's appeal, setting aside the Single Judge's order directing the Revenue Department to grant Input Tax Credit ... Input tax credit - failure to produce the documents to verify the claim of genuineness of the Input Tax Credit claimed by the Assessee - HELD THAT:- The present writ appeal deserves to be allowed and the matter deserves to be remanded back to the Assessing Officer for enquiry and verification in the matter. Without production of the relevant documents, the Assessee cannot claim the Input Tax Credit and since admittedly the Assessee has not produced the relevant documents, merely because the registration details existed on the rolls of the Revenue Department, it could not per se prove the validity and verification of the transactions in question. Appeal allowed by way of remand. Issues:Claim for Input Tax Credit without producing relevant documents for verification.Analysis:The High Court of Madras heard an intra-court appeal filed by the Revenue against a Single Judge's order directing the Revenue Department to grant Input Tax Credit to the Assessee, M/s. All India Metal and Alloys. The Assessee had not produced essential documents for verification, such as purchase bills, registers, bank statements, and proof of goods movement. The Revenue contended that without verifying these documents, the Input Tax Credit claim could not be granted.The learned counsel for the Revenue argued that the Assessee's failure to produce the necessary documents hindered the verification process. The Court noted that the Assessee did not provide the ten documents requested, which were crucial for determining the genuineness of the Input Tax Credit claim. Despite the service of notice, no appearance was made on behalf of the respondent Assessee.The Court decided that without the relevant documents, the Assessee could not claim Input Tax Credit. The Court emphasized the importance of verifying the authenticity of transactions and remanded the matter back to the Assessing Officer for further investigation. The Court clarified that the mere existence of registration details with the Revenue Department did not validate the transactions without proper documentation.Additionally, the Court reviewed a judgment cited by the Single Judge but found that it was not applicable to the present case. The Court highlighted the differences in facts between the cited case and the current scenario, emphasizing that the judgment had been misapplied.Consequently, the Court allowed the Revenue's appeal, setting aside the Single Judge's order and remanding the matter to the Assessing Officer for a fresh assessment. The Assessee was directed to provide the necessary records for verification. The Court instructed the Assessing Officer to complete the assessment within six months, considering the significant delay in the proceedings.In conclusion, the Writ Appeal was allowed with no costs, and the connected miscellaneous petition was closed.