Case Law Details
Malar International Vs Deputy State Tax Officer (Madras High Court)
In a recent judgment, the Madras High Court, in the case of Malar International vs Deputy State Tax Officer, dismissed a writ petition (WP No. 198 of 2024) filed by Malar International against the Deputy State Tax Officer. The court held that disputes related to the adequacy of evidence cannot be addressed in proceedings under Article 226 of the Constitution.
Facts:
Malar International (“the Petitioner”) was issued a Show Cause Notice dated February 3, 2023, by the Revenue Department (“the Respondent”) pertaining to the purchase made from M/s. Siba Auto Private Limited (“the Supplier”). The Petitioner filed a reply dated March 6, 2023, asserting that, the supply is genuine and submitted documents such as purchase invoice, bank statements, lorry receipts and e-way bills along with the reply. However, the claim of the Input Tax Credit (“ITC”) was rejected by the Petitioner vide Order dated September 12, 2023 (“the Impugned Order”) on the ground that, gate pass was not submitted and the Supplier could not be traced at the registered place of business.
Aggrieved by the Impugned Order, the Petitioner filed a writ petition before the Hon’ble Madras High Court.
Issue:
Whether Writ Petition is maintainable when the proceedings are dependent upon adequacy of evidence?
Held:
The Hon’ble Madras High Court in Writ Petition No. 198 of 2024 held as under:
- Noted that, the ITC was denied after going through the documents on record provided by the Petitioner pertaining to alleged purchase of goods from the Supplier.
- Further Noted that, the crucial aspect of the adjudication in the present matter depends upon the adequacy of evidence pertaining to actual purchase and delivery of goods to the Petitioner.
- Opined that, the aforementioned disputes cannot be addressed in proceedings under Article 226 of the Constitution.
- Held that, the writ petition is dismissed.
Conclusion: The Madras High Court’s ruling underscores the limitations of addressing evidentiary disputes in writ petitions under Article 226. It emphasizes the importance of statutory remedies and the appropriate forums for adjudicating disputes involving factual intricacies. Taxpayers are reminded to explore statutory avenues when challenging decisions based on evidence evaluation, ensuring a fair and comprehensive adjudication process.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner assails an order dated 12.09.2023 by which input tax credit was refused on the basis that the petitioner availed of such credit on the basis of supplies from a non-existent supplier.
2. The petitioner states that a show cause notice dated 03.02.2023 was received from the respondent calling upon the petitioner to show cause with regard to the purchase of goods from M/s.Siba Auto Private Limited. By reply dated 06.03.2023, the petitioner asserted that the supply was genuine and submitted documents such as purchase invoices, bank statements, lorry receipts and E-way bills. In spite of submitting such documents, the petitioner states that the impugned order was issued rejecting the claim for input tax credit on the grounds that gate passes were not submitted and that the supplier could not be traced at the registered place of business in Tamil Nadu.
3. Learned counsel for the petitioner submits that the supplier is still active and functioning at the address specified in paragraph 8 of the affidavit in Mangalore, Karnataka. Consequently, the petitioner states that it is possible for the respondent to verify the details of such supplier from the GST common web portal.
4. In response to these submissions, Ms.Amirtha Poonkodi Dinakaran, learned Government Advocate, who accepts notice on behalf of the respondents, submits that a statutory appeal is available against the impugned order. The next submission is that entitlement to input tax credit is governed by Section 16 of the Tamil Nadu Goods and Services Tax Act, and that a registered person is entitled to input tax credit under clause (b) of sub-section 2 thereof only if such person is able to establish that she has received the relevant goods or services. In the case on hand, learned counsel submits that a show cause notice was issued to the petitioner on the basis of an inspection carried out at the premises of the registered supplier in Tamil Nadu. In particular, it is submitted that the registered supplier was found to be not functioning at the relevant premises. Since disputed questions of fact arise, learned counsel submits that the appropriate forum for adjudication is the statutory appellate authority.
5. From the documents on record, it appears that input tax credit was denied by appraising the documents on record with regard to the alleged purchase of goods by the petitioner from M/s.Siba Auto Private Limited. Therefore, the adjudication of this dispute hinges on the adequacy of evidence in support of the actual purchase and delivery of the goods to the petitioner. Such disputes cannot be conveniently addressed in proceedings under Article 226 of the Constitution of India. Therefore, W.P.No.198 of 2024 is dismissed without any order as to costs by leaving it open to the petitioner to avail of the statutory remedy. Consequently, connected Miscellaneous Petitions are closed.
****
(Author can be reached at [email protected])
Author Bio
