TaxTMI 
TaxTMI 
2010 (8) TMI 879
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was noticed that he has accounted as local purchase of "feeder clamp sets" on the invoices which are in the names of following suppliers: (1) M/s. S.L.V. Enterprises. (2) M/s. T.D. and Company. (3) M/s. Pooja Trading Corporation. (4) M/s. Ummed Sales Corporation. By accounting the invoices, which are in the names of above suppliers, he had availed of input-tax credit thereon and claimed the same in the returns furnished to the Department in the tax periods of October 2005 and September, October, November and December of 2006. On cross-verification and investigation conducted by the Department, revealed that the above suppliers were not existing at the addresses given in the invoices and the turnover and the tax collected in the so-called invoices had not been declared to the Department and the suppliers had been "deregistered" for non-filing of returns. According to the taxing authorities, the investigation revealed that the invoices which were in the names of above firms were issued by some benami persons. There was an attempt to evade taxes by way of issuing fictitious invoices by the benami persons and by obtaining the said invoices by the purchase dealer. The investigatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o sold articles to the assessee were all registered dealers and they had received payment by way of cheque from the assessee, which cheque has been duly encashed and if they had not paid tax and not filed returns that would not be held against the assessee. In fact, all the allegations, which were made in this regard were not substantiated by any material on record. The Department did not make available to the assessee the so-called statements recorded by those dealers or other adverse material on which they came to pass the said order. Therefore, he submits, not only the order is opposed to principles of natural justice but is also illegal and the order passed by the appellate authority has been interfered with without proper justification and therefore, he prays for allowing of the appeal. Per contra, the learned Government Advocate supporting the impugned order contends that the material on record clearly discloses that after the discrepancy was noticed in the course of the enquiry, it is the assessee who spoke about the mediator from whom the goods were produced and handed over those invoices. However, when they were asked to furnish particulars, they have neither denied nor f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is part, any private transfer or delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment." (sic) It is not in dispute that, a show-cause notice as contemplated under section 3(3) of the Act had ben issued and the assessee had given his written reply. Now, the only question is, whether the assessee had knowingly produced a false tax invoice to support a deduction of input tax, which is available to him under law. The revisional authority has clearly set out the adverse materials justifying imposition of penalty. they have clearly set out number of invoices raised by the four suppliers with invoice number, date, quantity, value of goods and VIT and IRG numbers. The total input-tax credit claimed by the assessee is Rs. 3,85,183. From the dates of the invoice, it is clear that the supply is neither occasional nor stray cases. It is continuous and it is for three months from October 2005 to December 2005. The format of tax invoices of these fraudulent suppliers is almost similar and common. The payments towards the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appropriate to disallow inputtax credit claimed on fictitious invoices and levy penalty as per sections 70 and 72 and interest as per section 36 of the Act. Whereas, since the "burden of proof' lies on the dealer to prove the correctness of his claim of input-tax credit, as provided under section 70 of the Act, a show-cause notice/proposition notice as given below was issued and served by providing an opportunity of 10 days of time. Whereas, on cross verification, it was revealed that the turnover and the VAT collected in the above invoices have not been declared to the Department by the above suppliers and they have been 'deregistered' in view of non-filing of returns. On investigation made by the Department, it was revealed that the above suppliers are not existing at the addresses given in the invoices. Further, at the time of visit, you have furnished the copies of tax invoices and inward goods receipts and inspection reports (shortly called as 'IRGN') by stating that you have purchased the goods through a 'mediator' and the 'mediator' has supplied the goods with the above invoices which have been taken into your store vide IRGNs. Whereas, ....