In Vat Appeal 11/2023 -DEL HC- Delhi High Court rules Assessing Authority has rightful authority to call for records and verify ITC claims, dismisses M/s Chitra Hardware’s appeal
Justice Vibhu Bakhru & Justice Amit Mahajan [12-07-2023]

Read Order: M/s Chitra Hardware V. Commissioner of VAT & Anr.

Chahat Varma

New Delhi, August 9, 2023: The High Court of Delhi has ruled against M/s Chitra Hardware (appellant) and upheld the authority of the Assessing Authority to call for records and verify the input tax credit (ITC) claimed by the assessee. The Court emphasized that the onus of proving the genuineness of the ITC rests with the assessee.

The appellant had filed the present appeal challenging the order passed by the Appellate Tribunal for Delhi Value Added Tax. This order dismissed the appellant's appeal against an earlier order issued by the Objection Hearing Authority (OHA). The OHA's order rejected the appellant's objection under Section 74 of the Delhi Value Added Tax Act, 2004, which was raised against the default assessment of tax conducted by the Assessing Authority for the financial year 2013-14 under Section 32 of the DVAT Act. The Assessing Authority denied the appellant's claim for a refund related to its ITC. The denial was based on the grounds that the appellant failed to provide sufficient documentary evidence to establish the genuineness of the ITC.

The two-judge bench of Justice Vibhu Bakhru and Justice Amit Mahajan observed that the Assessing Authority, the OHA, and the Tribunal had rejected the appellant's challenge to the default assessment because the appellant failed to provide any evidence to support the payment of ITC. The bench held that since this was a question of fact, it was not within the purview of review in the current proceedings. The bench also noted that there was no disagreement regarding the fact that the appellant did not submit relevant material before the Assessing Authority, OHA, or the Tribunal.

The appellant's argument that additional material to establish ITC could be verified from online returns and forms filed by dealers from whom goods were purchased was dismissed by the bench. The bench remarked that the Assessing Authority had the rightful authority to call for records and verify ITC claims, and the onus of proving the genuineness rested with the assessee.

The bench also rejected the appellant's claim of mala fide intentions behind the Assessing Authority's order, as mala fides must be specifically pleaded with full particulars, which was not done in this case.

Consequently, the bench found no valid grounds to entertain the present appeal and dismissed it accordingly.