Order Date – 28 November 2023

Parties: M/S Shiv Trading Vs State Of U.P. And 2 Others

Facts –

• The Petitioner, M/S Shiv Trading, made purchase during the period 2018-19 from one M/s Krishna Trading Company, Mathura and due tax invoice, payments, etc. were made through banking channel and thereafter, Input Tax Credit (ITC) was availed.
• On an inspection carried out in the premises of M/s Krishna Trading Company it was found that the M/s Krishna Trading Company was non-existent therefore the petitioner was imposed with tax and penalty along with interest.

Issue –

• Whether the ITC can be denied when the supplier is found to be non-existent?

Order –

• The Single Bench of Hon’ble High Court observed that the goods have been shown to be purchased from M/s Krishna Trading Company, Mathura. In support thereof, tax invoice, e-way bill, weighment receipt before & after loading, bilty, etc. were filed and on the basis of the said documents, ITC was availed by the petitioner.
• Thereafter, on scrutiny, neither M/s Krishna Trading Company was found to be in existent, nor the persons, who issued the bilty and weighment slip, was found in existent. Once the very basis to show that the movement of goods has taken place was doubted, the petitioner, apparently, failed to prove actual physical movement of goods.
• From the perusal of the record shows that the petitioner failed to discharge its onus to prove and establish beyond doubt the actual transaction, actual physical movement of goods as well as the genuineness of the transactions and as such, the proceedings have rightly been initiated against the petitioner under section 74 of the GST Act.
• The writ petition lacks merits and is dismissed.