- Case Name: Civil Appeal No. 230 of 2023
- Justice Name: M.R. Shah
- Date of Verdict: March 13, 2023
Brief Facts:
– M/s Ecom Gill purchased green coffee beans and claimed input tax credit (ITC).
– Assessing officer disallowed ITC finding irregularities.
– Appellate authority and High Court allowed ITC to M/s Ecom Gill.
– State of Karnataka appealed in Supreme Court against High Court order.
Submissions by State of Karnataka:
– Mere invoices or payment by cheque is not enough to claim ITC.
– Burden is on purchasing dealer under Section 70 of KVAT Act to prove actual transaction and physical movement of goods.
Submissions by M/s Ecom Gill:
– They discharged burden by producing valid invoices and making online payment.
– No other document required under KVAT Act to claim ITC.
Analysis:
– Burden of proving ITC claim is correct is on purchasing dealer under Section 70 KVAT Act.
– Dealer must prove actual physical movement of goods, not just invoices and payment.
– M/s Ecom Gill failed to discharge this burden.
– High Court and appellate authority erred in allowing ITC.
– Order of assessing officer disallowing ITC restored.
Key Takeaways:
– The burden of proving genuineness of transactions to claim ITC is on the purchasing dealer. Mere invoices or payment proof is not enough.
– Actual physical movement of goods needs to be proved to claim ITC.
– Tax authorities can deny ITC if purchasing dealer fails to discharge this burden of proof.