The Allahabad High Court while staying the assessment order held that the Input Tax Credit (ITC) under Goods and Service Tax (GST) cannot be denied by citing absence of toll plaza receipt.
The bench of Justice J.J. Munir has observed that the tax invoices, GSTR-2A, records of payment through Bank are sufficient to comply with the requirement of Section 16 of the GST Act and entitle the petitioner to claim benefit of the input tax credit. So far as the absence of the Toll Plaza receipt is concerned, the transaction relates to the year 2018, when every Highway did not have a Toll Plaza and alternate routes/non toll roads were available.
The petitioner/assessee challenged an assessment order passed by the department assessing GST for the months of June-July, 2018 under Section 74 of the GST Act.
The petitioner purchased the goods from a supplier known as M/s Kali Traders during June-July, 2018, which were dispatched to him through transport for which there are invoices, bilties and e-way bills on record giving complete particulars of the transporters and the vehicle number etc.
The petitioner had paid the supplier through a banking channel paying for the entire worth of goods, including GST. At the time when the transaction was done, the supplier was registered with the Department of the GST and the mere fact that the supplier allegedly did not deposit the GST would not entail denial of the input tax credit, which the petitioner has been denied merely on account of the fact that the supplier did not deposit the GST, or at the later date, his registration was cancelled.
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The provisions of Section 16(2) (c) of the U.P. G.S.T. Act, 2017 would not be attracted for the reason that four places down the chain of transactions, one of the suppliers had not paid GST. The tax invoices, GSTR-2A, records of payment through Bank are sufficient to comply with the requirement of Section 16 of the GST Act and entitle the petitioner to claim benefit of the input tax credit.
Section 16 of the GST Act lays down the eligibility and conditions for taking input tax credit.
The petitioner argued that the search of the supplier, who was found not to exist at his address, was conducted by the department after one year of the transaction during which period of time the possibility of a change in the affairs of the supplier cannot be ruled out.
The court while listing the matter for orders on 25.09.2024 along with a report regarding status of pleadings, ordered that the operation of the order passed by the Additional Commissioner-2 (Appeal)-3, State Tax, Noida, Gautam Buddh Nagar and the order dated 24.08.2022 passed by the Deputy Commissioner, Sales Tax shall remain stayed provided the petitioner deposits 30% of the assessed tax, after adjusting the amount of tax already deposited for the months of June-July 2018.
Case Title: M/S Astol Cleantech Pvt Ltd Versus State Of UP
Case No.: Writ Tax No. – 1279 Of 2024
Date: 4.9.2024
Counsel For Petitioner: Shubham Agrawal
Counsel For Respondent: Arvind Mishra