Burden of proof in VAT input tax credit claims and entry tax on unproven purchases upheld, relief denied.

The text addresses burden of proof in VAT input tax credit and entry tax claims, holding that the dealer bears the onus to prove bona fide purchases and actual physical movement of goods; failure to establish genuineness and transport details defeats non-taxability and deduction claims, resulting in tax levy. Verification showed inconsistent vehicle registrations and missing evidence, leading to rejection of claimed purchases and justification for treating sales as inter-area purchases subject to entry tax. Revisions were allowed subject to costs of Rs. 5,000 each to be deposited with the department within one month.

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Issues Involved:
1. Legality of deleting the amount of tax levied by the assessing authority.
2. Justification of deleting specific amounts of tax.

Summary:

Issue 1: Legality of Deleting the Amount of Tax Levied by the Assessing Authority

The revisions pertain to the assessment year 2016-17 under section 28(2) of the VAT Act and section 9(4) of the U.P. Tax on Entry of Goods Act, 2007. The Commercial Tax Tribunal deleted the amount of tax levied by the assessing authority, shifting the burden of proof to the Department. The Tribunal confirmed the rejection of the books of account but accepted the declared turnover and tax, deleting the tax amount assessed by the assessing authority. The Court emphasized that under section 16 of the UP VAT Act, the burden of proof lies upon the dealer to prove the existence of circumstances for exemptions or reliefs. The dealer must prove beyond doubt the actual movement of goods. The Apex Court in "The State of Karnataka Vs. M/s Ecom Gill Coffee Trading Private Limited" held that the burden of proving the correctness of ITC remains upon the dealer, and mere production of invoices or payments by cheque is insufficient.

Issue 2: Justification of Deleting Specific Amounts of Tax

The Tribunal's decision to delete the tax amounts of Rs. 72,50,000/- and Rs. 12,50,000/- as well as Rs. 25,000/- was challenged. The Court noted that the dealer failed to prove the actual physical movement of goods, as some vehicle numbers provided were fictitious or belonged to two-wheelers and passenger vehicles. The Tribunal's observation of shifting the burden to the Department was contrary to section 16 of the UP VAT Act. The presumption by the assessing authority treating the purchases from unregistered dealers was justified. Consequently, the levy of entry tax on HDEP bags was also justified.

Conclusion:

The Court set aside the judgement and order dated 04.11.2022 passed by the Commercial Tax Tribunal, Aligarh Division, Aligarh, and allowed both revisions with a cost of Rs. 5,000/- each, to be deposited within one month. The questions of law were answered accordingly.

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