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SGST High Court Cases

GST - Demand for reversal of Input Tax Credit, maintenance of proper documents and e-way bill, Cross-examination of the suppliers – Demand for reversal of ITC availed on the ground that the suppliers had not supplied the goods and had not paid the tax to the exchequer - Whether the Department was justified in reversing the ITC availed by the petitioners in the absence of cross-examination of the suppliers - Petitioner also contended that once the assessment orders have been passed against the erring suppliers, there cannot be a recovery of the input tax credit that was availed by the petitioners on the strength of the supplies made by them to the respective petitioners – HELD - to justify availment of ITC on the strength of the document prescribed under Section 16(2) of the CGST/SGST, 2017 read with Rule 138 of the CGST/SGST Rules, 2017, both the suppliers and purchasers are required to maintain proper books of account including e-Way Bill – In the present case, none of the petitioners are in possession of any e-Way Bill as is contemplated under the provisions of the GST enactments and the Rules made thereunder. In such a case, the failure of the Department to facilitate cross-examination of the suppliers is not fatal - The statements of the suppliers were recorded in the presence of the petitioners and they are signatories to the statement - The adjudication under GST laws is not governed by strict rules of evidence and the Department is only required to arrive at a conclusion based on the records and preponderance of probabilities. The burden is on the recipient to prove that the goods were physically received and mere production of invoices is not sufficient. The petitioners have failed to produce any documents, including e-way bills, to substantiate the movement and receipt of goods - it appears that the entire value of tax liability was discharged by the suppliers from and out of ineligible Input Tax Credit to facilitate availing of such ineligible credit by the petitioners to defeat the very purpose of allowing ITC under the provisions of the Act - The ratio of the Supreme Court judgment in State of Karnataka v. Ecom Gill Coffee Trading Private Limited applies, wherein it was held that the burden of proving the correctness of the ITC claim lies on the recipient, and mere production of invoices is not sufficient - The writ petitions are dismissed
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