2023 (9) TMI 955 - HC - GST

Input tax credit claims when invoices don't appear in GSTR-2A: genuine purchases and proof of tax paid prevail; denial set aside.

Denial of ITC solely because the relevant invoices/tax did not reflect in Form GSTR-2A was in issue. The HC held that non-remittance of tax by the ... Input Tax Credit - Section 16(2) of the GST Act - GSTR-2A as facilitator for self-assessment - Burden of proof on claimant to prove genuineness of ITC - Assessing officer's duty to examine evidence and not deny ITC solely on GSTR-2A mismatch - Remand for fresh considerationInput Tax Credit - GSTR-2A as facilitator for self-assessment - Assessing officer's duty to examine evidence and not deny ITC solely on GSTR-2A mismatch - Denial of input tax credit solely because the relevant amount was not reflected in Form GSTR-2A. - HELD THAT: - The Court held that Form GSTR-2A operates as a facilitative record for the assessee's self-assessment and its non-reflection of an amount is not, by itself, a sufficient ground to deny input tax credit. The assessing authority erred in disallowing the petitioner's higher ITC claim only on the basis that the amount did not appear in GSTR-2A. Reliance was placed on the Central Board press releases and jurisprudence recognising GSTR-2A as a facilitator; consequently, non-reflection in GSTR-2A does not automatically defeat an otherwise bonafide claim where requisite conditions under Section 16(2) are met and evidence supports the claim. [Paras 5, 7, 8]Denial of ITC solely for non-reflection in GSTR-2A is unsustainable; assessing officer must not reject the claim on that ground alone.Section 16(2) of the GST Act - Burden of proof on claimant to prove genuineness of ITC - Extent and obligation of the assessee to prove genuineness of transactions and remittance to the supplier for claiming ITC. - HELD THAT: - The Court affirmed that eligibility for ITC is subject to the conditions in Section 16(2) and that the burden of proving the correctness and genuineness of the ITC claim lies on the purchasing dealer. The petitioner must furnish evidence to demonstrate payment of tax to the supplier and genuineness of the transactions; mere production of invoices or payment by cheque may be insufficient. The Court noted the guidance of the Supreme Court (on analogous VAT provisions) that the purchaser must discharge this burden by detailed supporting material before credit can be allowed. [Paras 3, 6, 7]Assessee must discharge the burden of proof regarding payment to and remittance by the supplier and the genuineness of transactions before ITC can be allowed.Remand for fresh consideration - Assessing officer's duty to examine evidence and not deny ITC solely on GSTR-2A mismatch - Whether the matter should be remanded for fresh consideration by the assessing officer and the scope of that exercise. - HELD THAT: - The Court directed remand to the Assessing Officer for fresh adjudication: the petitioner is to be given an opportunity to produce evidence within a stipulated period, and the assessing officer must examine that evidence and pass a fresh order in accordance with law. If the assessing officer is satisfied on the evidence that the claim is bonafide and genuine, input tax credit must be allowed. The remand is for adjudication on merits based on evidence, not a mere mechanical reliance on GSTR-2A. [Paras 8]Matter remanded to the Assessing Officer to permit the petitioner to produce evidence and to decide the ITC claim afresh in accordance with law.Final Conclusion: The assessment order denying the petitioner's input tax credit solely because the amount was not reflected in GSTR-2A was set aside; the matter is remanded to the Assessing Officer to afford the petitioner an opportunity to adduce evidence and to decide the claim on merits, the petitioner bearing the burden to prove genuineness and remittance to the supplier. 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.