The Supreme Court vide judgement of the case of State of Karnataka vs. Ecom Gill Coffee Trading Private Limited has clarified that for claiming Input Tax Credit, genuineness of the transaction and actual physical movement of the goods has to be proved by the dealer, as per interpretation of Section 70 of the Karnataka Value Added Tax Act, 2003.
For claiming ITC, genuineness of the transaction and actual physical movement of the goods are the sine qua non and the aforesaid can be proved only by furnishing the name and address of the selling dealer, details of the vehicle which has delivered the goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc.
The purchasing dealers have to prove the actual physical movement of the goods, alleged to have been purchased from the respective dealers. If the purchasing dealer fails to establish and prove the said important aspect of physical movement of the goods alleged to have been purchased by it/them from the concerned dealers and on which the ITC have been claimed, the Assessing Officer is absolutely justified in rejecting such ITC claim.
