Title: "Court Quashes Assessment Order on Input Tax Credit Reversal, Calls for Reconsideration Based on Genuine Transaction Evidence"
In a recent legal development, a petitioner has challenged an assessment order dated December 30, 2023, which reversed the Input Tax Credit (ITC) availed, citing the retrospective cancellation of the GST registration of the relevant supplier. The petitioner contends that the reversal was unjust, supported by legitimate purchases from M/s.Shikhar Technologies in 2017-2018, substantiated by tax invoices, e-way bills, transport documents, and proof of payment through regular banking channels.
The petitioner's legal representative draws attention to the fact that the ITC reversal was solely based on the retrospective cancellation of the supplier's GST registration. In response, Mr. C. Harsha Raj, the learned Additional Government Pleader, acknowledges the petitioner's concerns and notes the prevalence of bill trading practices involving the creation of documents like tax invoices and e-way bills.
The impugned order, as per the operative portion, rejects the petitioner's contentions, stating that proof of the existence of M/s.Shikhar Technologies should have been provided. The court finds this reasoning inadequate, asserting that the petitioner had already submitted relevant documents supporting the transaction. The court deems the assessment order unsustainable in the given circumstances.
Consequently, the court quashes the impugned assessment order and remands the matter for reconsideration. The assessing officer is directed to examine the genuineness of the transaction by thoroughly reviewing all relevant documents. The court emphasizes that the ITC claim should not be rejected based solely on the retrospective cancellation of the supplier's GST registration. A fresh assessment order is to be issued upon reconsideration, offering a reasonable opportunity to the petitioner, within a maximum period of two months from the date of receiving a copy of the court's order.
The writ petition is disposed of on the mentioned terms, and no costs are imposed. Connected miscellaneous petitions are closed in light of this decision. This legal development ensures a fair evaluation of the petitioner's ITC claim, emphasizing the importance of examining all relevant evidence in determining the genuineness of transactions.
Case-Engineering Tools Corporation, Represented by its Partner Versus The Assistant Commissioner (ST) , Chennai
Citation-2024 TAXONATION 301 (MADRAS)
