The onus is on the Assessee to prove the movement of goods and services

By: Admin
May 24, 2024
Categories: Important Pronouncements
4 Min Read

The Hon’ble Calcutta High Court in the case of Roshan Sharma v. Assistant Commissioner of Revenue, State Tax, West Bengal & Ors. (M.A.T. 854 of 2024 dated May 07, 2024) set aside the Adjudication Order affirming tax demand, interest, and penalty proposed in the Show Cause Notice. The matter was remanded back because the Assessee had not been given an effective opportunity to rebut allegations, which had been made against the supplier and transporter from whom the statement was obtained.

Facts:

Roshan Sharma (“the Appellant”) stated that the registration of selling dealer’s was cancelled with retrospective effect and on the date on which the transactions were done by the Appellant, the registration of the selling dealer was valid. The Appellant failed to prove that there was a movement of goods.

Therefore, a Show Cause Notice dated November 03, 2024 (“the SCN”) was issued to the Appellant demanding INR 2,82,32,394/- along with interest and penalty. Subsequently, an Adjudication Order dated February 01, 2024 (“the Impugned Order”) was passed by the Assistant Commissioner of Revenue, State Tax (“the Adjudicating Authority”) confirming the demand raised in the SCN.

The Appellant was not given an effective opportunity to rebut the allegations, which have been made against the Supplier and the transporter from whom the declaration has been obtained by the Authority.

The Appellant contended that there were a bunch of e-way bills, which clearly showed the transportation of goods to various purchasers from the Appellant and such e-way bills cannot be rejected as fake since there are statutory documents and will be available on the GST portal.

Hence, aggrieved by the Impugned Order, the Appellant filed the present writ petition.

Issue:

Whether the onus is on the Assessee to prove the movement of goods and services?

Held:

The Hon’ble Calcutta High Court in M.A.T. 854 of 2024 held as under:

Directed that, the Adjudicating Authority to furnish the copies of the statements obtained from the suppliers and transporters to the Appellant within a week. The adjudication shall be completed as expeditiously as possible preferably within a period of 60 days. Further, the Appellant is entitled to submit his further explanation along with the necessary documents. If the Appellant requests for cross-examination of those persons, the same should be permitted. Thereafter, the Adjudicating Authority shall pass fresh orders on merits and in accordance with law.
Noted that, there was a negative balance in the credit ledger. Therefore, as on date, the blocking of such ledger will not in any manner be prejudiced against the Appellant. However, it was made clear that in case funds flow into the ledger, the blocking of the ledger shall be restricted to a sum of INR.2,82,32,394/- only.
Held that, the Appellant is bound to prove by proper evidence to establish the movement of goods and in the present case, the Appellant had no opportunity to cross-examine the Suppliers and transporters. Further, the statements recorded from them were not furnished to the Appellant. Hence, the case was remanded to the Adjudicating Authority for fresh consideration. The appeal and the writ petition including connected applications were allowed. The Impugned Order was set aside.