Fake invoice

[ajay chharia]

Mr. A, an Importer and whole seller of Dry fruits sells its goods in open market after taking full amount in advance. As per trade practice transactions take place through brokers/ commission agents and buyer pay the brokerage or commission. Mr. A has sold the goods during tax period when E way bill was not implemented. As alleged by the department that buyer of Mr. A has indulged in passing the fake credit to its customers and at present he is not traceable. on the basis of same now Mr. A received the penalty notice for issuing the fake invoice. Mr. A has duly deposited the output tax and has only invoice copy issued to him against supply made and payment received in advance. Being local sale he has no builty/proof of dispatch as import consignment directly send to him either full or in parts to different customers. Mr. A has no storage facility of his own. no sale has been made to that particular customer after may,2018.Whether onus of proof is on Mr. A, pl provide legal decision in support of same, if any

AI Summary

Onus of proof in fake-invoice allegations: taxpayer must prove actual supply and corroborate records to rebut claims.
Allegations that a supplier issued a fake invoice require the taxpayer to furnish credible proof of actual supply and transactional authenticity, while the department must produce empirical evidence supporting the allegation. Payment of output tax alone does not dispel a contention of bogus invoicing; statutory compliance requires corroborative documents such as import documentation, bills of entry, broker records, and proof of receipt or dispatch to rebut denial of input tax credit and any inference of mens rea.