Bhawar Life Style Vs Assistant Commissioner Central Tax (Karnataka High Court)
The Karnataka High Court considered two writ petitions challenging separate Orders-in-Original that rejected claims made through GST transitional forms TRAN-1 and TRAN-2 for the period from July 2017 to March 2022. Since both petitions involved the same assessee, the Court decided to club the matters and dispose of them through a common order.
The rejection of TRAN-1 was based on findings recorded by the Adjudicating Authority that the quantity and value of inputs did not match the transitional credit claimed. The authority also observed that the taxpayer had not maintained a detailed stock register showing the description of goods, quantity of each item, and the value of stock on hand. On that basis, the authority concluded that the credit availed by the taxpayer was irregular and confirmed the demand.
With regard to TRAN-2, the Order-in-Original stated that the taxpayer had not furnished details of inputs held in stock as on 1 July 2017. It also recorded that invoices or other supporting documents evidencing payment of tax carried forward to the Electronic Credit Ledger had not been produced.
During the hearing of the writ petitions, the Court noted the petitioner’s submission that the adjudicating authority had not properly considered the documents produced, including those referred to in an e-mail at Annexure ‘E’. According to the petitioner, the authority had merely asserted that the value of inputs did not match the transitional credit without examining the supporting material.
