Order Date – 18 October 2023

Parties: M/S Malik Traders Vs State Of U.P. And 2 Others

Facts –

• The Petitioner, M/S Malik Traders, is engaged in the purchase and sale of waste materials, plastic scrap, paper scrap and metal scrap. They availed input tax credit on turnover disclosed during April 2018 to September 2019.
• A show cause notice on 23.1.2019 under Section 74 of UP GST Act on the ground of wrong availment of input tax credit to which a reply was submitted by the petitioner. Being not satisfied with the reply tax liability along with penalty were demanded by the order dated 4.10.2019.
• It was contended by the petitioner that if the selling dealer have not paid the tax / deposited the tax with the Government, the benefit of input tax credit cannot be denied to the petitioner.

Issue –

• Whether submitting tax invoice, e-way bill, GR or payment details are sufficient to claim input tax credit?

Order –

• The Single Bench of Hon’ble High Court observed that the petitioner has not bought details such as payment of freight charges, acknowledgement of taking delivery of goods, toll receipts and payment thereof has been provided. Thus, in the absence of these documents, the actual physical movement of goods and genuineness of transportation as well as transaction cannot be established and, in such circumstances, further no proof of filing of GSTR 2 A has been brought on record, the proceeding has rightly been initiated against the petitioner.
• The Apex Court in the case of State of Karnataka Vs. M/s Ecom Gill Coffee Trading Private Limited (Civil Appeal No. 230 of 2023, decided on 13.03.2023), held that primarily burden of proof for claiming the input tax credit is upon the dealer to furnish the details of selling dealer, vehicle number, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc. to prove and establish the actual physical movement of the goods. Further by submitting tax invoice, e-way bill, GR or payment details is not sufficient.
• Hence it was held that no interference is called for in the impugned orders. The writ petition fails and is dismissed accordingly.