Invoices, cheque payment not sufficient to claim ITC under VAT: SC

Apex court allows tax authorities' appeal against Karnataka High Court judgment

The Supreme Court (SC) has set aside a Karnataka High Court order that allowed dealers to claim input tax credit (ITC) under the VAT regime by producing invoices and cheque payments.

The SC allowed tax authorities' appeal against the High Court judgment. It said a dealer claiming ITC has to prove beyond doubt the occurrence of the actual transaction” and the “actual physical movement of the goods".

It pronounced the order HC as “erroneous” and said that, “for claiming ITC, genuineness of the transaction and actual physical movement of the goods are the sine qua non and the aforesaid can