Tax Authorities Must Comprehensively Review Input Tax Credit Claims, Reassess Documentation, and Provide Fair Hearing to Petitioner

HC ruled in favor of petitioner challenging Input Tax Credit (ITC) assessment orders. The court quashed existing orders and directed reassessment, requiring tax authorities to comprehensively review ITC claims using all available documentation. Petitioner granted opportunity to submit supporting documents, with authorities mandated to conduct fresh assessment within two months and provide personal hearing.

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Issues Involved:
The petitioner challenges separate assessment orders for three assessment years regarding Input Tax Credit (ITC) claims.

Details of the Judgment:

Issue 1: Eligibility of ITC claims
The petitioner, engaged in trade of electrical products and hardware, asserts eligibility for ITC in the mentioned assessment periods, supported by GSTR-2A and GSTR-9 returns. The rejection of ITC claims in the impugned orders was solely due to non-claiming of ITC in GSTR-3B returns, as highlighted by the petitioner's counsel.

Issue 2: Burden of Proof and Statutory Remedy
The respondent argues that the burden of proof lies on the registered person to establish ITC eligibility and suggests that the petitioner should have availed the statutory remedy instead of approaching the Court. The respondent contends that the petitioner failed to discharge the burden of proof, justifying no interference with the impugned orders.

Issue 3: Rejection of ITC Claim
The orders under scrutiny rejected the petitioner's ITC claims solely on the ground of non-claiming in GSTR-3B returns, as exemplified in the order for the assessment year 2017-2018. The Court emphasized that the assessing officer should thoroughly examine the validity of ITC claims based on all relevant documents, rather than solely relying on GSTR-3B returns.

Judgment Outcome:
The Court quashed the impugned orders and remanded the matters for reconsideration. The petitioner was granted two weeks to submit all documents related to ITC claims, following which the assessing officer was directed to provide a reasonable opportunity for a personal hearing and issue fresh assessment orders within two months. The writ petitions were disposed of with no costs, and connected miscellaneous petitions were closed.

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