The Rajasthan High Court dismissed buyer’s Writ Petition challenging ITC reversal on the pretext of the supplier being a fake firm.
Despite the existence of an alternative remedy available to the petitioner, the petitioner has filed the writ petition seeking to invoke extraordinary jurisdiction of the Court on the submission that there is no proper consideration of the reply of the petitioner.
Counsel for the petitioner submitted that in a case where the Department seeks reversal of input tax credit on the ground that the supplier has not paid tax, the press release requires the Authorities to first take recourse to the mechanism for recovery from the supplier/seller and it is only when an exceptional circumstance exists where the dealer is missing or there is closer of business by supplier or supplier not having adequate assets etc, the buyer could be proceeded against.
Counsel for the respondents submitted that present is a case where the reversal of input tax credit has taken place under the impugned order on factual premise that the transactions shown are with a bogus/fake firm only to seek input tax credit.
The court found that present is not a case where the Authorities have proceeded on assumption and admission of factual premise that though there exist seller/supplier, input tax credit has been wrongly availed by the buyer or the seller so as to first take action against the supplier/seller before buyer is proceeded against.
“Without commenting upon the sufficiency of the material on record with regard to the alleged supplier firm being a fake/bogus firm not in existence, suffice it to say that this petition raises a factual dispute and has nothing to do with any jurisdictional issue, much less violation of principles of natural justice. Therefore, this case is distinguishable from the cases, which have been cited at the bar to seek intelligence of this Court”, the court said.
Case Information
Case title: M/s N.H. Lubricants v/s State Of Rajasthan and ors.
Citation: D.B. Civil Writ Petition No. 10609/2024
Judges Name: Chief Justice Manindra Mohan Shrivastava and Justice Ashutosh Kumar
Petitioner Counsel: Mr. Siddharth Bapna, Advocate Mr. Mehul Mittal Advocate
Respondent Counsel: Mr. Sandeep Taneja, Additional Advocate General & Mr. Naresh Gupta, Advocate