Additional Commissioner of Commercial Taxes Vs Shankara Infrastructure Materials Ltd
Date: October 13, 2024
Court: Supreme Court
Bench:
Type: Civil Appeal
Subject Matter
No ITC to buyer without proof of genuine transactions
Summary
In the case "The Additional Commissioner of Commercial Taxes v. M/s Shankara Infrastructure Materials Ltd.", the Hon’ble Supreme Court dealt with an appeal where M/s. Shankara Infrastructure Materials Ltd. was served notice but did not appear before the tax officer. The Additional Commissioner of Commercial Taxes contended that the case was similar to the previously adjudicated case of "State of Karnataka v. Ecom Gill Coffee Trading Private Limited." The appellant alleged that the Respondent made a bogus claim for Input Tax Credit (ITC) without engaging in actual transactions, asserting that transactions with non-existent or bogus entities disallowed such claims. The Hon’ble Supreme Court, in its judgment, relied on the principles established in the Ecom Gill case, which emphasized the criteria for valid ITC claims and the consequences of engaging in transactions with non-existing entities. Consequently, the Court disposed of the case against M/s. Shankara Infrastructure Materials Ltd., reinforcing the notion that dealers must substantiate their claims for ITC with genuine transactions. Thus, this case underscores the importance of legitimate documentation and actual transactions in tax compliance, alongside the legal repercussions established under the KVAT Act for issuing false invoices or documents.
1. Leave granted.
2. Heard Mr. V. N. Raghupathy, learned counsel appearing for the appellant.
3. The notice on the respondent (assessee) was duly served but as can be seen from the office report, none has entered appearance on their behalf.
4. On 19.07.2024, when this case was last listed, Mr. Raghupathy appearing on behalf of the Revenue had submitted that the present case is squarely covered by the ratio of the judgment in State of Karnataka Ecom Gill Coffee Trading Private Limited reported in 2023 SCC OnLine SC 248. It is submitted that since this is a case of bogus claim without any actual transactions, the assessee cannot claim the input tax credit. Transactions with a non-existing or bogus entities do not satisfy the criterion for claiming input tax credit.
5. Having considered the above submission and the absence of any contest from the side of the respondent, we dispose of the appeal in light of ratio in Ecom Gill Coffee Trading Private Limited (supra). The appeal stands allowed in terms of the said judgment.