ITC cannot be denied solely due to vendor’s non-filing of returns and J1-J2 mismatch { M/s Aayushi Telecom v. State of Maharashtra S.A. No. 77 of 2024 dated 17.03.2026}
Facts:
- ITC was disallowed during assessment due to J1-J2 mismatch.
- The First Appellate Authority partly allowed the claim.
- Appellant contended that the mismatch related to purchases from M/s Rajchandra Agencies.
- Ledger confirmation from the vendor and proof of payment through account payee cheques were submitted.
- Appellant argued that it had no control over the vendor’s failure to file returns and that the department should verify and recover tax from the vendor.
Issue:
Whether Input Tax Credit can be denied to the purchaser solely due to J1-J2 mismatch and non-filing of returns by the selling dealer, despite the purchaser producing evidence of genuine purchases and payment through account payee cheques.
Held:
- Tribunal observed that ITC should not be denied merely because the vendor failed to file returns.
- Assessing Authority should verify the genuineness of the transactions and examine the vendor’s assessment records.
- The procedure prescribed in Trade Circular No. 8T of 2012 and the principles laid down in the case of Mahalaxmi Cotton Ginning Pressing Oil Industries should be followed.
- The matter was remanded to the Assessing Authority for fresh consideration of the appellant’s ITC claim
