Shreeji Impex vs State of Gujarat

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Mukesh R. Shah, J.—Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Gujarat Value Added Tax Tribunal, Ahmedabad (hereinafter referred to as "the Tribunal") dated August 29, 2013 passed in Second Appeal No. 711 of 2010, by which, the learned Tribunal has dismissed the said appeal preferred by the appellant and has confirmed the orders passed by the assessing officer as well as first appellate authority denying the input-tax credit (partially), the appellant-purchaser-dealer has preferred the present tax appeal with the following proposed questions of law:

"(A) Whether honourable Appellate Tribunal (respondent No. 3) has failed to exercise the jurisdiction vested in it by not appreciating the law laid down by the apex court in the case of State of Maharashtra Through The Secretary Vs. Suresh Trading Company, ?

(B) Whether honourable Appellate Tribunal has failed to exercise the jurisdiction vested in it by affirming the order of the First Appellate Tribunal (respondent No. 2 herein), who ignored to take into consideration the documents on records, which has lead to miscarriage of the justice?

(C) Whether the honourable Appellate Tribunal has exceeded the jurisdiction vested in it by not appropriately considering the facts of the case and law cited at Bar?

(D) Whether honourable Appellate Tribunal has erred to take into consideration the effect of the retrospective cancellation of the registration of the few of the vendors from whom this appellant has purchased the goods?

(E) Whether honourable Appellate Tribunal has failed to appreciate that the order of disallowing Input-tax credit ("ETC", for short) to the appellant on the ground of alleged cancellation of the few traders with retrospective effect ("ITC" for short) by the competent authority (respondent No. 4 herein) is bad in law and illegal?

(F) The honourable Appellate Tribunal failed to appreciate the fact that competent authority has took the inspection of the records of the appellant and no illegality and/or infirmity was found while checking the records of the appellant. This suggests that transaction entered in between the parties were genuine. It is in this back ground it is submitted that whether honourable Appellate Tribunal was right in confirming the order of the competent authority and that of first appellate by overlooking the binding judgment of the apex court delivered in case of State of Maharashtra Through The Secretary Vs. Suresh Trading Company, ?

(G) Whether the Appellate Tribunal has committed an error of law while appreciating the judgment of apex court delivered in case of State of Maharashtra Through The Secretary Vs. Suresh Trading Company, ?"

That the appellant-purchaser-dealer claimed input-tax credit on the alleged purchase made by it worth Rs. 42,46,800 from one M/s. Leela Trading and three other dealers and claimed input-tax credit of Rs. 1,69,872 during the assessment year 2007-08. That on appreciation of evidence on record as well as considering the fact that the vendors from whom the appellant has alleged to have purchased the goods on which input-tax credit was claimed and their registrations were cancelled, the AO held that the appellant has failed to prove the actual purchase of the goods from the aforesaid vendors and as such there was actual moment of the goods at all on which the input-tax credit was claimed and therefore, it was the case of billing activity only for the purpose of getting input-tax credit and it was not proved by leading the evidence that in fact any tax was paid on the purchase of the aforesaid goods, for which tax was paid. Under the circumstances and by holding so the AO denied the input-tax credit claimed by the appellant on the purchase of goods worth Rs. 42,46,800, i.e., input-tax credit claim of Rs. 1,69,872.

Feeling aggrieved and dissatisfied with the order passed by the assessing officer denying the input-tax credit claim by the appellant, the appellant preferred appeal before the first appellate authority and first appellate authority dismissed the said appeal.

Feeling aggrieved and dissatisfied with the orders passed by the assessing officer as well as first appellate authority, the appellant preferred second appeal before the learned Tribunal and by the impugned judgment and order, the learned Tribunal has dismissed the said appeal confirming the orders passed by both the authorities below denying the input tax credit of Rs. 1,69,872 claimed by the appellant.

Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the Tribunal dismissing the appeal preferred by the appellant and confirming the orders passed by both the authorities below denying the input-tax credit of Rs. 1,69,872 claimed by the appellant, the appellant has preferred present tax appeal with the aforesaid proposed questions of law.

Shri J.F. Mehta, learned advocate for the appellant has vehemently submitted that all the authorities below have materially erred in denying the input-tax credit to the appellant on the purchase of goods worth Rs. 42,46,800. It is submitted that the AO denied the input-tax credit of the appellant on the ground that the registration of the vendors came to be cancelled. It is submitted that on the aforesaid ground, the input-tax credit on the purchase made by the appellant, cannot be denied. It is submitted that as such on cross check of, the records it was found that the appellant was having the stock which was reflected in the books of account, etc. It is submitted that even invoices with respect to the purchase of the aforesaid goods worth Rs. 42,46,800 were also placed on record. It is submitted that therefore, denial of input-tax credit on the purchase of goods worth Rs. 42,46,800 from M/s. Leela Trading and three other dealers ought not to have been denied. Shri Mehta, learned advocate for the appellant has heavily relied upon the decision in the case of State of Maharashtra Through The Secretary Vs. Suresh Trading Company, in support of his above submissions.

Present appeal is opposed by Shri Gandhi, learned Assistant Government Pleader appearing on behalf of respondent-State. It is submitted that as such there are concurrent findings of fact given by all the authorities below that the appellant failed to satisfy that in fact the appellant purchase the goods worth Rs. 42,46,800 on which input-tax credit was claimed and as such failed to prove that there was any movement of goods from vendors-M/s. Leela Trading and three other dealers to the appellant-purchaser. It is submitted that as such the appellant failed to prove that any tax was paid on the goods alleged to have been purchased by them worth Rs. 42,46,800. It is further submitted that even neither before first appellate authority nor before learned Tribunal nor even before this court the appellant has produced any documentary evidence to show actual movement of goods on which the input-tax credit has been claimed. It is submitted that therefore, in the facts and circumstances of the case the decision in the case of State of Maharashtra Through The Secretary Vs. Suresh Trading Company, would not be applicable to the present case.

Heard the learned advocates for the respective parties at length and perused the order passed by the learned Assessing Officer, order passed by the learned first appellate authority and the impugned judgment and order passed by the learned Tribunal. At the outset, it is required to be noted that the appellant claimed the input-tax credit of Rs. 1,69,872 on the purchase of the goods worth Rs. 42,46,800 from M/s. Leela Trading Company and other three vendors. In support of the above claim that they actually purchase the goods worth Rs. 42,46,800 from M/s. Leela Trading Company and other three vendors, the appellant relied upon the invoices/bills and their books of profit and loss. However, it is required to be noted that not a single document and/or material was placed on record to show the actual movement of the goods from the vendors to the appellant. The appellant miserably failed to prove the actual transaction by leading the cogent evidence and miserably failed to prove that purchase on which input-tax credit was claimed, were genuine and/or on which the tax was paid. There are concurrent findings of fact given by all the authorities below that the alleged transaction/purchase worth Rs. 42,46,800 from M/s. Leela Trading Company and three others, on which, the appellant claimed input-tax credit of Rs. 1,69,872 were not genuine and it was only billing activities for the purpose of claiming input-tax credit, etc. The aforesaid findings of facts recorded by all the authorities below are on appreciation of evidence and considering the material on record which are neither perverse nor contrary to the evidence on record.

Now, so far as decision of the honourable Supreme Court in the case of the State of Maharashtra Through The Secretary Vs. Suresh Trading Company, relied upon by the learned advocate for the appellant is concerned, it is required to be noted that in the present case input-tax credit is not denied solely on the ground that registration of the vendors-M/s. Leela Trading Company and three others were cancelled. As observed hereinabove, on appreciation of evidence all the three authorities below have concurrently held that in fact there was no moment of goods and it was only billing activity and transaction/alleged purchase on which input-tax credit was claimed, were not genuine. It is required to be noted that neither before the assessing officer nor before the first appellate authority, learned Tribunal and/or even before this court, the appellant has produced any evidence to show the actual movement of goods and the genuineness of the transaction/purchase from M/s. Leela Trading Company and three others on which input-tax credit was claimed. In view of the aforesaid facts and circumstances of the case, we are of the opinion that no error has been committed by any of the authorities below denying the input-tax credit of Rs. 1,69,872 claimed by the appellant. We are in complete agreement with the view taken by all the authorities below. In view of the above and for the reasons stated above, no substantial question of law arises in the present tax appeal and there are concurrent findings of fact given by all the authorities below with respect to genuineness of the transaction/purchase alleged to have been made by the appellant from M/s. Leela Trading Company and three others on which input-tax credit was made, present tax appeal deserve to be dismissed and is accordingly dismissed. In view of the dismissal of tax appeal, Civil Application No. 359 of 2014 deserves to be dismissed and is also dismissed.