2023 (9) TMI 1651 - HC - GST

Tax Credit Claim Denied: Insufficient Evidence Leads to Rejection of Input Tax Credit Under Section 16

NAHASSHUKOOR Versus ASSISTANT COMMISSIONER SECOND CIRCLE ALAPPUZHA, UNION OF INDIA REPRESENTED BY SECRETARY TO GOVERNMENT, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS NEW DELHI, STATE OF KERALA THIRUVANANTHAPURAM

The HC ruled against the petitioner's input tax credit claim for 2017-18, finding non-compliance with CGST/SGST Act requirements. The court upheld the ... Denial of claim of input tax credit - petitioner did not appear in pursuance of the show cause notice nor did he provide any document or evidence to discharge his burden under Section 155 of the GST Act - HELD THAT:- In the present case, the petitioner, despite show cause notice, chose not to provide any evidence in respect of his claim for the input tax credit, nor did he appear for a hearing on the date fixed. When the petitioner himself has given up his right to prove his claim for the input tax credit, this Court cannot help such an assessee by entertaining this writ petition. Petition dismissed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment are:Whether the petitioner is entitled to claim input tax credit under the CGST and SGST Acts for the tax period 2017-18.Whether the petitioner fulfilled the necessary conditions under Section 16 of the CGST/SGST Act 2017 to claim input tax credit.Whether the petitioner discharged the burden of proof as required under Section 155 of the GST Act to substantiate his claim for input tax credit.Whether the assessment of tax, interest, and penalties by the Assessing Authority was justified in the absence of a response or evidence from the petitioner.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Entitlement to Input Tax CreditRelevant Legal Framework and Precedents:The entitlement to input tax credit is governed by Section 16 of the CGST/SGST Act 2017, which outlines specific conditions that must be met for a registered person to claim such credit. These include possession of a tax invoice, receipt of goods or services, and payment of tax to the government.Court's Interpretation and Reasoning:The court emphasized the necessity of compliance with Section 16 for claiming input tax credit. The petitioner failed to provide evidence of meeting these conditions, particularly the possession of necessary documentation and proof of tax payment.Key Evidence and Findings:The petitioner did not respond to the show cause notice or provide any documentation to substantiate the claim for input tax credit. The Assessing Authority relied solely on GSTR 2A and GSTR 3B forms, which indicated discrepancies.Application of Law to Facts:Given the lack of evidence and non-compliance with Section 16 requirements, the court found that the petitioner was not entitled to the claimed input tax credit.Treatment of Competing Arguments:The petitioner did not present any competing arguments or evidence, leading the court to dismiss the petitioner's claim.Conclusions:The court concluded that the petitioner was not entitled to the input tax credit due to failure to meet the statutory requirements under Section 16.Issue 2: Burden of ProofRelevant Legal Framework and Precedents:Section 155 of the GST Act places the burden of proof on the claimant to demonstrate eligibility for input tax credit.Court's Interpretation and Reasoning:The court highlighted that it was the petitioner's responsibility to provide credible evidence to support the claim for input tax credit. The absence of any such evidence led to the denial of the claim.Key Evidence and Findings:No evidence was provided by the petitioner despite the opportunity to do so, resulting in the Assessing Authority's decision being based on available records.Application of Law to Facts:The failure to provide evidence meant the petitioner did not meet the burden of proof required by Section 155, justifying the denial of the input tax credit.Treatment of Competing Arguments:There were no competing arguments presented by the petitioner, reinforcing the court's decision.Conclusions:The court concluded that the petitioner did not discharge the burden of proof, leading to the rejection of the input tax credit claim.Issue 3: Justification of AssessmentRelevant Legal Framework and Precedents:The assessment of tax, interest, and penalties is governed by the provisions of the CGST/SGST Act, particularly in cases of non-compliance with statutory requirements.Court's Interpretation and Reasoning:The court found that the Assessing Authority acted within its rights to assess tax, interest, and penalties based on the information available, given the petitioner's non-cooperation.Key Evidence and Findings:The absence of a response or evidence from the petitioner justified the Assessing Authority's reliance on the discrepancies noted in GSTR 2A and GSTR 3B.Application of Law to Facts:The court applied the relevant provisions to uphold the assessment made by the Assessing Authority, citing the petitioner's failure to engage with the process.Treatment of Competing Arguments:With no competing arguments from the petitioner, the court upheld the assessment as justified.Conclusions:The court concluded that the assessment of tax, interest, and penalties was justified and upheld the decision of the Assessing Authority.3. SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal Reasoning:'If there is a difference between GSTR 2A and GSTR 3B, then it is for the assessee/dealer to prove his claim of input tax credit by leading cogent and credible evidence for his claim regarding input tax credit.'Core Principles Established:The burden of proof for claiming input tax credit lies with the claimant, as per Section 155 of the GST Act.Compliance with the conditions outlined in Section 16 of the CGST/SGST Act is mandatory for claiming input tax credit.Failure to respond to show cause notices or provide evidence can result in the denial of claims and assessment of penalties.Final Determinations on Each Issue:The petitioner was not entitled to the claimed input tax credit due to non-compliance with statutory requirements.The petitioner failed to discharge the burden of proof, leading to the denial of the input tax credit claim.The assessment of tax, interest, and penalties by the Assessing Authority was justified and upheld by the court.