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of <h1>Denial of ITC based solely on non-reflection in GSTR-2A unsustainable if transaction genuineness proven</h1> <h3>Diya Agencies Versus The State Tax Officer, The State Tax Officer, Union Of India, The Central Board Of Indirect Taxes & Customs, The State Of Kerala</h3> Kerala HC held that denial of ITC solely based on non-reflection in GSTR-2A is unsustainable. The petitioner cannot be held responsible if the supplier ... Validity of assessment order - Input Tax Credit - Denial of benefit of ITC which was not reflected in GSTR 2A - HELD THAT:- If the seller dealer (supplier) has not remitted the said amount paid by the petitioner to him, the petitioner cannot be held responsible. Whether the petitioner has paid the tax amount and the transactions between the petitioner and seller dealer are genuine are the matter on facts and evidence. The petitioner has to discharge the burden of proof regarding the remittance of tax to the seller dealer by giving evidence as mentioned in the Judgment of the Supreme Court in THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED [2023 (3) TMI 533 - SUPREME COURT]. The impugned Exhibit P-1 assessment order so far denial of the input tax credit to the petitioner is not sustainable, and the matter is remanded back to the Assessing Officer to give opportunity to the petitioner for his claim for input tax credit. -If on examination of the evidence submitted by the petitioner, the assessing officer is satisfied that the claim is bonafide and genuine, the petitioner should be given input tax credit. Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of the input tax credit. The assessing authority is therefore, directed to give an opportunity to the petitioner to give evidence in respect of his claim for input tax credit. Petition allowed by way of remand. Issues involved:The judgment deals with the challenge to an assessment order limiting input tax credit, based on discrepancies in GSTR 2A, for the assessment year 2017-18.Challenge to Assessment Order:The petitioner challenged the assessment order limiting input tax credit for CGST and SGST, claiming higher credit than allowed due to discrepancies in GSTR 2A. The petitioner argued that the assessing authority should independently examine the claim of input tax credit, citing relevant case laws.Conditions for Availing Input Tax Credit:The conditions prescribed in Section 16(2) of the GST Act must be fulfilled for a dealer to avail credit of any input tax. The petitioner contended that all conditions under Section 16(2) were met, including payment of tax to the seller dealer and issuance of valid tax invoice.Interpretation of Section 16 and Case Laws:The judgment referred to the interpretation of Section 16 and relevant case laws to emphasize that the burden of proving the correctness of input tax credit claim lies upon the purchasing dealer. Mere production of invoices or payment by cheques is insufficient to discharge this burden; genuine transactions must be proved with detailed evidence.Denial of Input Tax Credit:The assessment order denied higher input tax credit solely based on discrepancies in GSTR 2A, without considering the genuineness of transactions between the petitioner and the seller dealer. The burden of proof regarding tax remittance to the seller dealer lies with the petitioner, requiring evidence as per legal precedents.Remand and Opportunity for Evidence:The court found the denial of input tax credit in the assessment order unsustainable and remanded the matter back to the Assessing Officer. The petitioner was directed to provide evidence within fifteen days to prove the genuineness of the claim for higher input tax credit. The assessing authority was instructed to pass a fresh order based on the evidence submitted by the petitioner.Conclusion:The writ petition challenging the assessment order limiting input tax credit was finally disposed of, with directions for the petitioner to provide evidence to support the claim. The court emphasized that discrepancies in GSTR 2A alone should not be a sufficient ground to deny input tax credit, highlighting the importance of proving the genuineness of transactions.
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