ITC Benefit Rightly Denied to Assessee Who Failed to Prove & Establish Actual Physical Movement of Goods | HC

Case Details: Malik Traders v. State of U.P. - [2023] 155 taxmann.com 517 (Allahabad)

Judiciary and Counsel Details

• • Piyush Agrawal, J.
  • Pradeep Kumar Srivastava & Pavan Kumar Srivastava, for the Petitioner.

Facts of the Case

In the present case, the petitioner had challenged the adjudication order passed by the department demanding approx. Rs. 12 lacs as wrong availment of input tax credit (ITC). The department confirmed the demand on the ground that the petitioner had only brought on record tax invoices, e-way bills, GR and payment through banking channel, but details such as payment of freight charges, acknowledgement of taking delivery of goods, toll receipts and payment thereof were not provided.

High Court Held

The Honorable High Court noted that as per Section 16 of GST Act, 2017, ITC would be allowed subject to fulfilment of certain conditions and credit can’t be availed without actual physical movement of goods or genuineness of transaction. In the instant case, the petitioner was required to prove and establish beyond doubt the actual physical movement of goods and genuineness of transportation by furnishing details such as payment of freight, toll receipts etc.

Therefore, in absence of these documents, actual physical movement of goods, genuineness of transportation as well as transaction could not be established. Thus, the Court held that proceedings under Section 74 had rightly been initiated against the petitioner.