Tax Credit Challenge: Statutory Appeal Preferred Over Writ Petition for Resolving Complex Input Tax Credit Verification Issues

HC ruled on input tax credit dispute, finding the case involves complex factual issues better resolved through statutory appeal mechanisms. The court dismissed the writ petition without costs, directing the petitioner to pursue remedies under Section 16 of the GST Act through appropriate appellate authorities, emphasizing that Article 226 proceedings are unsuitable for resolving detailed evidentiary disputes regarding supplier verification and goods delivery.

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Issues involved: Refusal of input tax credit based on supplies from a non-existent supplier, adequacy of evidence in support of purchase and delivery of goods.

For the issue of refusal of input tax credit based on supplies from a non-existent supplier, the petitioner challenged an order refusing input tax credit due to availing credit from a non-existent supplier. The petitioner submitted documents to prove the genuineness of the supply, but the claim was rejected citing missing gate passes and inability to trace the supplier at the registered place of business. The petitioner argued that the supplier is active at a different address in Karnataka, suggesting verification through the GST common web portal. The respondent, represented by the Government Advocate, pointed out the availability of a statutory appeal against the order. It was emphasized that entitlement to input tax credit is governed by Section 16 of the Tamil Nadu Goods and Services Tax Act, requiring the establishment of receiving relevant goods or services. The respondent highlighted that a show cause notice was issued based on an inspection revealing the non-functioning of the registered supplier at the specified premises, suggesting the statutory appellate authority for adjudication due to disputed facts.

Regarding the adequacy of evidence in support of the purchase and delivery of goods, the judgment highlighted that input tax credit denial was based on the appraisal of documents related to the alleged purchase from M/s.Siba Auto Private Limited. The resolution of this dispute relied on the sufficiency of evidence demonstrating the actual purchase and delivery of goods to the petitioner. Recognizing the complexity of such disputes, the court dismissed the writ petition without costs, advising the petitioner to pursue the statutory remedy available. The decision underscored that disputes involving factual complexities are not suitable for resolution under Article 226 of the Constitution of India, directing the petitioner to seek recourse through the appropriate statutory channels.

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