2024 (2) TMI 179 - HC - GST

Tax Credit Denied: Insufficient Documentation Leads to Rejection of Input Tax Claim Under CGST Provisions

M/s. KARUMPELIL MEDICALS Versus THE ASSISTANT COMMISSIONER, KERALA GOODS & SERVICE TAX DEPARTMENT TAX PAYER SERVICES, UNION OF INDIA, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, STATE OF KERALA

HC ruled against petitioner in tax credit dispute. Discrepancies in GSTR 3B and GSTR 2A returns led to denial of input tax credit of Rs.1,24,618.60. ... Input Tax Credit - failure to prove discharge burden under Section 155 of the CGST Act - violation of principles of natural justice - HELD THAT:- Considering the detailed discussion on the petitioner's supplies that if the petitioner had taken input tax credit may not support with cogent and technical evidence and he failed to discharge the burden under Section 155 of the CGST Act and considering the provision under Section 16(2)(C) of the CGST Act, input tax credit to the extent of Rs.1,24,618.60/- under CGST Act, there are no grounds to enter into the error of law, requiring this Court to interfere with the assessment order that deny the input tax credit. This writ petition is dismissed, however, it will be open to the petitioner to take recourse to any other remedy of appeal as provided under Section 107 of CGST/SGST Act within the said order and if the petitioner files the appeal, the appellate authority shall decide the issue on merits, without being influenced by any of the other issues made therein. Issues involved:The judgment involves the interpretation of Section 73(9) read with Rule 142(5&6) of the CGST/SGST rules, discrepancies in availing Input Tax Credit (ITC) as per GSTR 3B and GSTR 2A, failure to produce credible documents for inward supplies, assessment of interest and penalty, burden of proof under Section 155 of the CGST Act, and the denial of input tax credit under Section 16(2)(c) of the CGST Act.Interpretation of Section 73(9) read with Rule 142(5&6) of the CGST/SGST rules:The petitioner, a registered dealer under the CGST/SGST Act dealing with specific commodities, filed returns and statements for the financial year 2017-2018. Discrepancies were identified in availing ITC as per GSTR 3B and GSTR 2A, leading to a notice being issued to the petitioner regarding the same. Despite multiple opportunities for a personal hearing and submission of supporting documents, the petitioner failed to provide credible evidence for the inward supplies acquired, resulting in the assessment of interest, penalty, and denial of input tax credit.Assessment of interest, penalty, and denial of input tax credit:The petitioner's failure to produce sufficient evidence for the inward supplies from specific suppliers, lacking GSTIN and supplier seal details on invoices, led to the conclusion that the burden of proof under Section 155 of the CGST Act was not discharged. Consequently, an amount of Rs.1,24,618.60/- was disallowed as input tax credit, with an additional claim of the same amount, resulting in a total assessment of Rs.5,22,174/- along with interest at 18% per annum.Burden of proof under Section 155 of the CGST Act and denial of input tax credit under Section 16(2)(c):The detailed examination of the petitioner's supplies revealed a lack of substantial and technical evidence supporting the claim of input tax credit. The petitioner's failure to meet the burden of proof under Section 155 of the CGST Act, coupled with the provisions of Section 16(2)(c), justified the denial of input tax credit amounting to Rs.1,24,618.60/-. The court found no legal grounds to interfere with the assessment order denying the input tax credit.Conclusion:The writ petition was dismissed by the court, allowing the petitioner to pursue an appeal under Section 107 of the CGST/SGST Act. The appellate authority was directed to decide on the merits of the issue without being influenced by any other considerations present in the case.