Jain Steels And Alloys Mfrs Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
The petitioner challenged a reassessment order and consequential demand notice dated 30.03.2019 issued under the Karnataka Value Added Tax Act, 2003 for the tax period April 2014 to March 2015, insofar as it disallowed input tax credit. The petitioner, a registered dealer engaged in manufacturing and reprocessing of steel bars and related job work, contended that the denial of input tax credit was unjustified.
The reassessment proceedings were concluded by the Assessing Authority after issuing a proposition notice and considering the petitioner’s reply. The primary ground for denial of input tax credit was that the selling dealer had not deposited the taxes collected from the petitioner. The petitioner relied on a prior decision of the Court to argue that where transactions are genuine and claims are bona fide, input tax credit cannot be denied merely because the selling dealer failed to remit the collected tax to the Government.
On the other hand, the respondent contended that the burden of proof lies on the assessee under Section 70 of the Act. It was argued that no material was produced to establish that taxes were paid to the selling dealer, and since the selling dealer had not filed returns, it should be inferred that the dealer was bogus and the transactions were not genuine.
