Tax Proceedings Upheld: Input Tax Credit Denied Without Valid Documentation for GST Liability Set-off

The HC dismissed the writ petition challenging tax proceedings where petitioner sought to set off input tax credit against GST liability. The court found petitioner failed to substantiate inward supplies documentation and noted the petition appeared to be an attempt to avoid pre-deposit requirements for statutory appeal. Despite petitioner's system issues claims and allegations of jurisdictional errors, the court emphasized that mere electronic reflection of ITC is insufficient without valid documentation. The petition was dismissed with liberty for petitioner to pursue alternate remedy before the Deputy Commissioner within thirty days, who was directed to consider the appeal according to law.

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Issues:
Petitioner's entitlement to set off input tax credit against tax liability; Allegations of incorrect proceedings by the respondent; Availability of alternate remedy before the Deputy Commissioner, Goods and Service Tax; Delay in approaching the court challenging the impugned order.

Analysis:
The petitioner filed a writ petition seeking Certiorari and Mandamus to quash the respondent's proceedings in GSTIN and direct the adjustment of eligible ITC against tax liability for March 2018. The petitioner claimed to have earned input tax credit but faced system issues in setting it off against tax liability. Despite sending representations for rectification, the respondent issued pre-assessment and revised notices demanding payment. The petitioner argued that the impugned order was passed without jurisdiction and without considering their entitlement to set off the input tax credit.

The court considered arguments from both parties and noted that the impugned order mentioned the petitioner's alternate remedy before the Deputy Commissioner, Goods and Service Tax. It observed that the writ petition seemed to be an attempt to avoid pre-deposit for a statutory appeal. The court found that the petitioner failed to produce documents to substantiate inward supplies, leading to a lack of merit in their submission. The court emphasized the importance of validly availing input tax credit beyond mere electronic reflection in records to prevent unintended benefits. It also highlighted the delay in approaching the court after the expiry of the limitation period.

Despite the petitioner's failure to exercise the alternate remedy before the Deputy Commissioner, the court dismissed the writ petition with liberty for the petitioner to pursue the appropriate remedy within thirty days. The court directed the Deputy Commissioner to consider the appeal and pass orders in accordance with the law. The judgment concluded by dismissing the writ petition with no costs and closing the connected Miscellaneous Petition.

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