TaxTMI 
TaxTMI 
2025 (4) TMI 1055
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....8473 of 2023 Civil Writ Jurisdiction Case No. 18497 of 2023 Civil Writ Jurisdiction Case No. 18662 of 2023 Civil Writ Jurisdiction Case No. 15 of 2024 Civil Writ Jurisdiction Case No. 136 of 2024 Civil Writ Jurisdiction Case No. 211 of 2024 Civil Writ Jurisdiction Case No. 312 of 2024 Civil Writ Jurisdiction Case No. 343 of 2024 Civil Writ Jurisdiction Case No. 345 of 2024 Civil Writ Jurisdiction Case No. 356 of 2024 Civil Writ Jurisdiction Case No. 430 of 2024 Civil Writ Jurisdiction Case No. 542 of 2024 Civil Writ Jurisdiction Case No. 549 of 2024 HONOURABLE MR. JUSTICE P. B. BAJANTHRI And HONOURABLE MR. JUSTICE ALOK KUMAR SINHA For the Petitioners : Mr. Mrigank Mauli, Sr. Advocate Mr. Brisketu Sharan Pandey, Advocate Mr. Abhishek Kumar, Advocate Mr. Madan Kumar, Advocate For the Respondents : Mr. Vikash Kumar, SC 11 For UOI : Dr. K.N. Singh, ASG Mr. Anshuman Singh, Advocate JUDGMENT ( Per : HONOURABLE MR. JUSTICE P. B. BAJANTHRI ) In these bunch of petitions, petitioners are stated to be registered dealers. They had claimed Input Tax Credit (for short 'ITC') under Section 16 (2) of the Central Goods and Services Tax Act, 2017 (for short 'CGST Act') / Bihar Good....
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....o. 2. (Annexure - 11) 13.12.2022 Summary of show cause notices in GST DRC-01 and the show cause notices ("SCNs") under Section 73(1) of the Act for the relevant period was served upon the Petitioner. (Annexure - 12) 12.01.2023 The Petitioner replied to the aforesaid SCN once again disputing the entire tax demanded by the Respondent No. 2 (Annexure-13) 14.01.2023 The Respondent No. 2 passed the Orders under Section 73(9) of the CGST Act for the relevant period and directed the Petitioner to deposit the tax due amounting Rs. 26,14,086/- Rs. 7,45,014/- and Rs. 2,61,410/- (Annexure - 14) 20.02.2023 Recovery proceedings under Section 79 was initiated by the Respondent No. 2 by issuing FORM GST DRC-13 to the bank of the Petitioner. (Annexure - 15) 25.02.2023 The Petitioner requested Respondent No. 2 to remove lien created on the bank accounts and also submitted that the statutory timeline to file the appeal against the Adjudication Order has not lapsed. (Annexure - 16) 09.03.2023 The Petitioner being aggrieved of the Order, filed an appeal before the Respondent No. 2 under Section 107 of the CGST Act. (Annexure - 17) 11.08.2023 The Respondents fi....
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.... that goods need not be delivered to dealer - petitioner from supplier and it could be delivered to the end consumer by supplier directly on the request of dealer - petitioner. Whereas transaction papers relating to purchase and payment of tax by the petitioner to the seller and in-turn seller had remitted tax to the government, therefore, denial of ITC to the petitioner is on flimsy ground. The respondents have not disputed that the petitioner had paid tax to the seller and inturn seller had paid tax to the government. In such circumstances, there is no point in verifying whether goods were received by the dealer physically or not? 5. In the impugned order, concerned authority has taken note of two decisions namely Aastha Enterprises vs. The State of Bihar and Another passed in CWJC No. 10359 of 2023 and judgment of the Hon'ble Supreme Court in the case of State of Karnataka vs. M/s Ecom Gill Trading Private Limited reported in 2023 SCC OnLine SC 248 and further counter affidavit and supplementary counter affidavit have been filed in improving the impugned orders to the extent that deeming provision under Section 16 (2) (b) of CGST Act is for 'bill to ship transaction', which i....
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....ircular No. 241/35/2024-GST dated 31.12.2024, it is crystal clear that goods purchased by the dealer need not be physically delivered to him, on the other hand, manufacturer/seller on purchase of goods by the dealer and on instruction of dealer, purchased goods could be delivered to the end purchaser. In the light of the aforementioned position that goods purchased by the petitioner - dealer from supplier/manufacturer and on instruction of dealer to the manufacturer/supplier, purchased goods could be delivered to the end purchaser or consumer is the position in the present case, therefore, petitioner is entitled to claim ITC and rejection of his claim is liable to be set aside and further direction may be issued insofar as claim of ITC. Submissions on behalf of Respondent - State 9. Learned counsel for the respondent - State contended that under Section 16 (2) (b) read with Section 31 of the CGST Act relating to Tax Invoice, movement of goods from supplier to dealer are mandatory. In support of the aforementioned contention he relied on a decision namely State of Karnataka vs. M/s Ecom Gill Trading Private Limited. He also relied on supplementary counter affidavit filed on be....
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.... on the merits of the case, it is necessary to take note of certain statutory provisions like Section 16 relates to Eligibility and conditions for taking Input Tax Credit, Section 31 relates to Tax Invoice, Section 35 relates to Accounts and other records and Section 155 relates to Burden of Proof of CGST Act. Learned senior counsel for the petitioner submitted that impugned orders are liable to be set aside on the sole issue that Section 16 (2) (b) namely '(b) he has received the goods or services or both', receipt of goods in physical mode is not mandatory, since receipt of goods is to be interpreted in what mode viz, visible or invisible on behalf of dealer - petitioner from the supplier. Extract of the aforementioned provisions are as follows : "16. Eligibility and conditions for taking input tax credit (1) - Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the e....
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....pply shall be deemed to be a tax invoice; or (ii) tax invoice may not be issued.] (3) Notwithstanding anything contained in subsections (1) and (2) - (a) a registered person may, within one month from the date of issuance of certificate of registration and in such manner as may be prescribed, issue a revised invoice against the invoice already issued during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him; (b) a registered person may not issue a tax invoice if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed; (c) a registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed: Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be ....
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...., the invoice shall be issued before or at the time of supply or six months from the date of removal, whichever is earlier. Explanation - For the purposes of this section, the expression "tax invoice" shall include any revised invoice issued by the supplier in respect of a supply made earlier This clause provides for issuance of tax invoice within the prescribed period showing the prescribed particulars. This clause also empowers the Government to specify services, for which any other document issued in lieu of tax invoice, shall be deemed to be tax invoice and also specify services where no tax invoice is required to be issued. This clause provides for issue of documents other than tax invoice in certain cases. ( Notes on Clauses ). 35. Accounts and other records -(1) Every registered person shall keep and maintain, at his principal place of business, as mentioned in the certificate of registration, a true and correct account of-- (a) production or manufacture of goods; (b) inward and outward supply of goods or services or both; (c) stock of goods; (d) input tax credit availed; (e) output tax payable ....
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....visions of section 73 or section 74, as the case may be, shall, mutatis mutandis, apply for determination of such tax. This clause provides that every registered person shall keep and maintain at his principal place of business records showing true account of specified particulars. This clause casts responsibility on owner or operator of warehouse or godown or any other place used for storage of goods and on every transporter to maintain specified records. This clause empowers the Commissioner to notify a class of taxable persons to maintain additional accounts in other prescribed manner. This clause provides that every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant. (Notes on Clauses). 155. Burden of proof - Where any person claims that he is eligible for input tax credit under this Act, the burden of proving such claim shall lie on such person. This clause provides that the burden of proving rightful claim of input tax credit will lie on the person claiming the credit. (Notes on clauses)." 14. Respondent - State relied on two decisions namely i....
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....of goods from the supplier and thereafter it was sold to end consumer/purchaser and in-turn supplier has directly delivered the goods purchased by the petitioner - dealer to the end consumer or not. In this regard, the Assessing Officer has to take note of the aforementioned ingredients. 16. To overcome certain issues relating to transportation and delivery of goods on more than one occasion, there is agreement / memorandum of understanding between dealer and the supplier. On purchase of goods from the supplier, supplier was requested to deliver the goods to the end consumer directly, resultantly, there is no physical movement of goods to the petitioner from the supplier. This has not been appreciated by both the authorities in their impugned orders. In fact, respective contentions urged by the petitioners have not been appreciated and not dealt with, to that extent there is total non-application of mind. Whatever documents demanded by the authorities have been furnished from time to time with reference to their show cause notices and other communications. The cited two decisions namely in the case of Aastha Enterprises and State of Karnataka (cited supra) by the authorities hav....
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....No. 241/35/2024-GST dated 31.12.2024 in cases where goods are delivered by the supplier to the registered person (dealer), either directly or to any other person on the instruction of the said registered person. The registered person shall be considered to have received the said goods for the purpose of Clause (b) of Sub-Section (2) of Section 16 of CGST Act. Cases where goods are deemed to have been received by the registered person and in terms of explanation to Section 16 (2) (b) of CGST Act, the goods shall be deemed to be received by the registered person where : * the goods are delivered by the supplier to a recipient or to any other person on the direction of such registered person, whether acting as a agent or otherwise; * such direction may be given before or during movement of goods; and * the goods may be delivered either by way of transfer of document of title to goods or otherwise. 19. 'Received' - goods or services. This means that without the receipt of goods or services, ITC cannot be availed. The term 'received' is essential for establishing eligibility under the law. Explanation of 'deemed receipt' scenarios - The explanation un....
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....t case, the petitioner submitted that he had produced all necessary material information to the concerned authority to the extent that he is in receipt of goods from the supplier. On the other hand, he had given instruction to the supplier to supply the purchased goods to the end consumer. To this extent the concerned authority is required to examine relevant material information like papers of memorandum of understanding / agreement among the petitioner - dealer and supplier and intimation to the end consumer so as to complete the transactions relating to purchase of goods by the dealer from the supplier and further selling the goods to the end consumer and receipt of goods or not? 21. The cited decisions on behalf of the respondents are not assisting having regard to the issue involved in the present lis. The cited decisions are not relating to interpretation of Section 16 (2) (b) of CGST Act insofar as receipt of goods in the physical mode or not read with the fulfilling other conditions. In the case of Aastha Enterprises (cited supra), supplier had not deposited tax collected from the purchaser to the concerned government and it is mandatory. In the present case, the supplie....