State of Karnataka v. Tallam Apparels
Facts :
The assessee, a registered dealer dealing in garments, claimed input tax credit on purchases supported by invoices. The audit authority disallowed ITC under Section 39(1) alleging that transactions with certain dealers were not genuine and that the burden under Section 70 was not discharged. The First Appellate Authority upheld the disallowance, but the Karnataka Appellate Tribunal allowed the assessee’s appeal. The State filed a revision petition before the High Court challenging the Tribunal’s order.
Court Decision:
The High Court upheld the Tribunal’s order and dismissed the revision petition. It held that the assessee had discharged the burden under Section 70 by producing invoices and proof of payment through banking channels, establishing genuineness of transactions. The Court further held that once transactions are proved genuine, input tax credit cannot be denied merely because the selling dealer failed to remit tax. It was also held that the statute does not permit action against the purchasing dealer for default of the selling dealer.
Cases Referred by Court:
• Microqual Techno Pvt. Ltd. v. Additional Commissioner of Commercial Taxes
• Packwell Industries v. State of Karnataka
Other Case Law
Radiant Cash Management Services Ltd. vs. Commercial Tax Officer
Validity of multiple show cause notices for same tax period – Section 73 of the CGST Act, 2017 read with Rule 142 of the CGST Rules, 2017.
Facts:The petitioner challenged the show cause notice in Form GST DRC-01 dated 2...
Read MoreSri Padmavathi Marketing v. Assistant Commissioner of Commercial Taxes
Scope of Rule 86A – Whether ITC can be blocked for supplier when alleged wrongful availment is by recipient.
Case Facts:The petitioner challenged a show-cause notice proposing blocking of I...
Read MoreThe State (NCT) of Delhi vs. Khimji Bhai Jadeja
Clubbing of FIRs / Same Transaction – Sections 218, 219, 220 & 223 of the Code of Criminal Procedure, 1973 and Sections 420 & 120B of the Indian Penal Code.
Facts:An FIR was registered by the Economic Offences Wing, Delhi Police alleging...
Read More