Facts of the Case

The petitioner, M/S Malik Traders, filed a writ petition before the High Court of Jammu & Kashmir and Ladakh at Srinagar challenging the appellate order dated 08.12.2023 by which the appellate authority rejected its appeal. The appellate authority had held that the petitioner's Principal Supplier had failed to upload bills for the period under appeal, and that the Input Tax Credit (ITC) claimed by the petitioner for that period was consequently impermissible under the GST Act, 2017. The appellate authority further found that the petitioner had not proved the ITC claim was genuine and had not produced any documentary evidence in support, and accordingly rejected the claim.

Issues Involved

  1. Whether the appellate authority correctly rejected the petitioner's ITC claim on the ground that the Principal Supplier had not uploaded bills for the relevant period.
  2. Whether a writ court under Article 226 should itself adjudicate the disputed factual question of whether the supplier's returns were in fact uploaded but not reflected on the portal.
  3. What is the appropriate remedy where the petitioner asserts that GST return data was uploaded but not correctly reflected due to a portal discrepancy.

Petitioner's Arguments

  • It was not correct that the Principal Supplier had failed to upload the bills; in fact, the details had been uploaded in GSTR-1, Form A, under the B2C category.
  • The uploaded details had, unfortunately, not been reflected on the State GST portal, and it was this portal-level discrepancy — not any default by the supplier — that led the appellate authority to its adverse finding.
  • The petitioner would be satisfied if the matter were remanded to the respondents with a direction to reconsider it and pass appropriate orders after affording an opportunity of hearing.

Respondent's Arguments

  • The appellate authority's original findings, which the Government Advocate for the Union Territory relied upon, were that the Principal Supplier had not uploaded the relevant bills during the period under appeal.
  • The petitioner-appellant had failed to prove that the ITC claim was justified or genuine and had not submitted any documentary evidence in support before the appellate authority.
  • On this basis, the ITC claim was said to have failed the test of law and was rightly rejected by the appellate authority.

Court Order/Findings

  • The Court held that rather than exercising jurisdiction under Article 226 to examine an issue involving ascertainment of disputed facts, it would be more appropriate to direct the appellate authority to re-examine the matter.
  • The petitioner was directed to approach the appellate authority within two weeks and file the necessary documents to demonstrate that the Principal Supplier had indeed uploaded the bills showing payment of GST, so that the ITC claim and other benefits under law could be properly considered.
  • The appellate authority was directed to reconsider the petitioner's claim for ITC and other benefits, and to issue a fresh speaking order after hearing the petitioner, as expeditiously as possible.
  • The petition was disposed of with these observations and directions, without the Court itself ruling on the correctness of the original rejection.

Important Clarification

  • Where an ITC claim is denied on the ground that the supplier failed to upload returns/bills, and the taxpayer disputes this on facts (e.g., asserting the data was uploaded but not reflected on the portal), courts are inclined to remand the matter to the appellate/adjudicating authority for fresh factual examination rather than decide the dispute themselves under Article 226.
  • Taxpayers in such situations should be prepared to produce documentary evidence establishing that the supplier's GST filings were in fact made, to overcome an adverse finding based on non-reflection of data on the department's portal.
  • A remand of this kind carries no finding on the merits of the ITC claim itself — the appellate authority remains free to decide either way after considering the fresh material and hearing the parties.

Sections Involved

  • Article 226, Constitution of India — writ jurisdiction invoked; the Court declined to resolve disputed facts under this jurisdiction and instead remanded the matter.
  • GST Act, 2017 — governs the conditions for claiming Input Tax Credit and the requirement of the supplier's compliance in uploading outward supply details.

Decision – In Favour of

The petition was disposed of with directions, in part in favour of the Assessee: the outright rejection of the ITC claim was not allowed to stand unexamined, and the petitioner secured a fresh opportunity before the appellate authority, though no final ruling was made in the petitioner's favour on the merits of the ITC claim itself.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Jammu & Kashmir and Ladakh at Srinagar
  • Case No.: WP(C) 3425/2023
  • CNR: Not available on record
  • Coram: Hon'ble the Chief Justice (N. Kotiswar Singh) and Hon'ble Mr. Justice M. A. Chowdhary
  • Decision Date: 29-12-2023
  • Disposal Nature: Disposed of - appellate authority directed to re-examine the ITC claim

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