HC Directed Department to Provide Particulars and Documents Relied Upon for Fake Invoice Allegation Against Assessee

Case Details: Tvl. S.S. Metals v. State Tax Officer - [2024] 164 taxmann.com 674 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.
• D. Vijayakumar for the Petitioner.
• V. Prasanth Kiran, GA (T) for the Respondent.

Facts of the Case

The petitioner had availed of Input Tax Credit (ITC) in relation to supplies received from a supplier. The department initiated proceedings by issuing show cause notice and alleged that the petitioner was not entitled to ITC because the supplier was non-existent. The ITC was denied to the petitioner in spite of the petitioner submitting the relevant tax invoice, e-way bill and bank statement. It filed writ petition and contended that principles of natural justice were violated.

High Court Held

The Honorable High Court noted that the burden of proof is on the tax payer to establish entitlement to ITC, including by showing movement of goods. However, in the instant case, the department failed to provide documentary basis for conclusion of fake invoices and the petitioner submitted the relevant tax invoice, e-way bill and bank statement.

Moreover, the supplier had filed returns during the relevant period and these supplies were also reflected in the GSTR-2A. Therefore, the Court held that the impugned order was to be set aside and fresh order to be passed after giving opportunity of hearing on depositing 20% of disputed tax as condition. The Court also directed the department to provide particulars and documents relied upon for fake invoice allegation to enable petitioner’s response.