Copper Waste Traders Win Tax Challenge: Invoices and E-way Bills Validate Business Transactions and Nullify Previous Assessments

HC ruled on ITC dispute involving copper waste and scrap business. Impugned orders were quashed due to inadequate consideration of submitted invoices and E-way bills. Court directed fresh assessment with reasonable opportunity for petitioner to present evidence, effectively nullifying previous tax, penalty, and interest proposals without imposing costs.

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Issues involved:
The issues involved in this judgment are the alleged contravention of Section 16(2)(b) of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act) for the financial years 2020-21 and 2021-22.

Summary:

Issue 1: Wrong availment and utilization of Input Tax Credit (ITC)
The petitioner, engaged in the business of dealing in copper waste and scrap, was issued notices regarding alleged contravention of the TNGST Act. The petitioner responded with relevant ledger accounts, tax invoices, and E-way bills to support the claim that ITC was not wrongly availed. However, the explanation provided by the petitioner was rejected in the impugned orders dated 03.07.2023. The petitioner contended that the Assessing Officer did not consider the documents provided to show the proper purchase and delivery of input goods. The Additional Government Pleader (Taxes) pointed out that the ITC claim was rejected due to non-submission of documents. The impugned order noted the absence of valid supportive documents for the physical movement of goods, leading to the confirmation of tax, penalty, and interest proposals. However, the petitioner had submitted invoices and E-way bills detailing the purchases and transportation of goods, which were not adequately addressed in the impugned order. Consequently, the High Court quashed the impugned orders and remanded the matters for re-consideration, directing the second respondent to issue a fresh assessment order after providing a reasonable opportunity to the petitioner.

In conclusion, the writ petitions were disposed of with no costs, and related motions were closed as per the above terms.

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