High Court · 2025
Case Details
5. Aggrieved by the said order, the petitioner filed a first appeal. In the grounds of appeal, specific ground was taken that the goods were intercepted at Chhattisgarh and on e-Way bill, rubber stamp was put, but, by the impugned order dated 24.12.2024, the appeal was dismissed.
6. Counsel for the petitioner submits that in the impugned order the ground of appeal and argument of the petitioner was noticed but no weightage was given. He submits that once the goods in question were intercepted and checked, the movement of goods cannot be disputed to be forged or only a paper transaction. He further submits that the selling dealer's registration was cancelled on 28.09.2018 but the transaction took place prior to it, and on the date of transaction, the supplier of the petitioner was having a valid registration therefore no adverse inference can be drawn against the petitioner reversing the Input Tax Credit (ITC).
7. Per contra, learned Standing Counsel supports the impugned order. He submits that the proceedings has rightly been initiated against the petitioner under Section 74 as the registration of seller of the petitioner namely M/s Purvanchal Tradelink India, Sonbahdra was cancelled and once the seller was found non- registered, the entire proceedings is justified.
8. I have heard counsel for the parties and perused the material on record.
9. It is not in dispute that proceedings have been initiated against the petitioner under Section 74 holding that tax invoice No.0014 dated 20th June, 2018 issued by M/s Purvanchal Trade Link India, Sonbahdra is not a registered dealer and, therefore, the claim made by the petitioner was a paper transaction. The record further shows that in the transaction, SM Shop, Raipur, Chhattisgarh have issued a tax invoice No.00961 dated 20th June, 2018 which was a "Bill To Ship To" transaction where the truck number was specifically mentioned as CG10-C-6933. Further, petitioner has been shown as consignee and the supplier has been shown as buyer. The said fact has not been disputed by the authorities. Further, the record shows that specific pleadings in the grounds of appeal before the first appellate authority was taken that the said vehicle was intercepted by a mobile squad of Chhattisgarh and a rubber stamp was put on e-Way bill and was duly signed (copy of the grounds of appeal has been appended as Annexure 6 to the writ petition). The grounds taken by the petitioner have been noticed in the impugned order at internal page 2 of the impugned order but no rebuttal or contradicting material against the petitioner has been brought on record to justify the action.
10. Once the said fact has been noticed in the impugned order and not disputed at the movement of goods have started from Raipur, Chhattisgarh to the place of petitioner, the benefit of the same cannot be legally denied. Further, the copy of the tax invoice of the selling dealer SM Shop Raipur and e-Way bill have been filed at page 67 and 68 of the paper book as Annexure 6 which clearly shows the movement of goods was as "Bill To Ship To" transaction. Further, the record shows that the registration of the seller i.e. M/s Purvanchal Tradelink India, Sonbahdra was cancelled subsequent to the date of transaction, hence, no adverse inference can legally be drawn against the petitioner as on the date of transaction, the seller was having a valid registration.
11. Once on the date of transaction the seller was having a valid registration and the transaction was through a valid billing channel, which has neither been denied nor any adverse material has been brought on record, no adverse inference can be drawn against the petitioner.
12. In view of the above, the impugned orders cannot be sustained in the eyes of law and are hereby quashed.
13. The writ petition stands allowed.
14. Any amount deposited during pendency of the present litigation shall be refunded to the petitioner within a month from the date of presentation of a certified copy of this order. Order Date :- 18.8.2025 Kushal KUSHAL AGRAWAL High Court of Judicature at Allahabad
5. Aggrieved by the said order, the petitioner filed a first appeal. In the grounds of appeal, specific ground was taken that the goods were intercepted at Chhattisgarh and on e-Way bill, rubber stamp was put, but, by the impugned order dated 24.12.2024, the appeal was dismissed.
6. Counsel for the petitioner submits that in the impugned order the ground of appeal and argument of the petitioner was noticed but no weightage was given. He submits that once the goods in question were intercepted and checked, the movement of goods cannot be disputed to be forged or only a paper transaction. He further submits that the selling dealer's registration was cancelled on 28.09.2018 but the transaction took place prior to it, and on the date of transaction, the supplier of the petitioner was having a valid registration therefore no adverse inference can be drawn against the petitioner reversing the Input Tax Credit (ITC).
7. Per contra, learned Standing Counsel supports the impugned order. He submits that the proceedings has rightly been initiated against the petitioner under Section 74 as the registration of seller of the petitioner namely M/s Purvanchal Tradelink India, Sonbahdra was cancelled and once the seller was found non- registered, the entire proceedings is justified.
8. I have heard counsel for the parties and perused the material on record.
9. It is not in dispute that proceedings have been initiated against the petitioner under Section 74 holding that tax invoice No.0014 dated 20th June, 2018 issued by M/s Purvanchal Trade Link India, Sonbahdra is not a registered dealer and, therefore, the claim made by the petitioner was a paper transaction. The record further shows that in the transaction, SM Shop, Raipur, Chhattisgarh have issued a tax invoice No.00961 dated 20th June, 2018 which was a "Bill To Ship To" transaction where the truck number was specifically mentioned as CG10-C-6933. Further, petitioner has been shown as consignee and the supplier has been shown as buyer. The said fact has not been disputed by the authorities. Further, the record shows that specific pleadings in the grounds of appeal before the first appellate authority was taken that the said vehicle was intercepted by a mobile squad of Chhattisgarh and a rubber stamp was put on e-Way bill and was duly signed (copy of the grounds of appeal has been appended as Annexure 6 to the writ petition). The grounds taken by the petitioner have been noticed in the impugned order at internal page 2 of the impugned order but no rebuttal or contradicting material against the petitioner has been brought on record to justify the action.
10. Once the said fact has been noticed in the impugned order and not disputed at the movement of goods have started from Raipur, Chhattisgarh to the place of petitioner, the benefit of the same cannot be legally denied. Further, the copy of the tax invoice of the selling dealer SM Shop Raipur and e-Way bill have been filed at page 67 and 68 of the paper book as Annexure 6 which clearly shows the movement of goods was as "Bill To Ship To" transaction. Further, the record shows that the registration of the seller i.e. M/s Purvanchal Tradelink India, Sonbahdra was cancelled subsequent to the date of transaction, hence, no adverse inference can legally be drawn against the petitioner as on the date of transaction, the seller was having a valid registration.
11. Once on the date of transaction the seller was having a valid registration and the transaction was through a valid billing channel, which has neither been denied nor any adverse material has been brought on record, no adverse inference can be drawn against the petitioner.
12. In view of the above, the impugned orders cannot be sustained in the eyes of law and are hereby quashed.
13. The writ petition stands allowed.
14. Any amount deposited during pendency of the present litigation shall be refunded to the petitioner within a month from the date of presentation of a certified copy of this order. Order Date :- 18.8.2025 Kushal KUSHAL AGRAWAL High Court of Judicature at Allahabad