Tax Credit Claim Reinstated: Petitioner Granted Opportunity to Provide Evidence and Seek Fair Reassessment of Input Tax Credit

HC allowed the writ petition challenging the denial of Input Tax Credit. The court set aside the assessment order and directed the tax authority to reevaluate the claim, providing the petitioner an opportunity to substantiate evidence. The case was remitted for fresh consideration, with instructions to review documents within fifteen days and issue a new order based on comprehensive evaluation.

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Issues: Impugning Ext. P5 assessment order denying Input Tax Credit.

Summary:
The petitioner filed a writ petition under Article 226 challenging the Ext. P5 assessment order denying Input Tax Credit of Rs. 1,04,342. The denial was based on the grounds that the claimed credit was not reflected in Form GSTR-2A and no proof of payment of GST to the Government was submitted. The assessing authority relied on Section 155 of the GST Act, 2017, which places the burden on the claimant to prove the payment of tax. However, the High Court, referencing various judgments, held that the assessing officer must give an opportunity to the assessee to substantiate their claim for Input Tax Credit, even if there is a disparity between GSTR-2A and GSTR-3B. The assessing authority is required to independently evaluate the evidence provided by the assessee to determine the genuineness of the claim.

The Court, considering the facts and the precedent set by the case of Diya Agencies, set aside the assessment order denying Input Tax Credit and remitted the case back to the assessing authority for reevaluation. The petitioner was directed to appear before the assessing authority with all relevant documents within fifteen days. The assessing authority was instructed to review the evidence promptly and issue a fresh order based on their findings. Finally, the writ petition was disposed of with the aforementioned directions.

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