A khata is the ledger account a supplier keeps for a particular buyer, in a bound account book or in accounting software, recording each sale (debit) and each payment (credit) and the running balance. Under the evidence law, entries in books of account regularly kept in the course of business are relevant and admissible, but by themselves are not sufficient to charge a person with liability; they must be supported by the underlying invoices, delivery proof and, ideally, the buyer's acknowledgement.
How the khata works as evidence in India
The supplier produces the ledger, shows it was maintained regularly in the ordinary course of business, and proves each material entry with the invoice, challan or e-way bill and the receipt. If the ledger is electronic, a certificate under the evidence law for electronic records accompanies the printout. The buyer's own records help too: its GSTR-2B will show the supplier's invoices, its ledger confirmations show agreed balances, and its TDS deductions show it treated the amounts as payable. Courts and Facilitation Councils routinely decide trade claims on such evidence.
- Maintain the ledger contemporaneously; backdated entries are easily exposed.
- Attach the invoice and delivery proof to each debit.
- Get the buyer to sign or stamp a balance confirmation every year.
Why it matters for getting paid
A supplier whose only evidence is "my khata shows ₹8 lakh" will struggle; a supplier with a khata, invoices, challans, e-way bills and a signed confirmation has a near-complete case. The khata also fixes the dates for limitation and MSMED Act interest. See running account, statement of account and ledger confirmation.
How FundRaksha uses it
FundRaksha's advocates review the client's ledger against invoices, GST filings and bank receipts to produce a reconciled statement for the notice, so the buyer cannot attack the figures. Clients are given a simple document checklist at the free consultation. Fee: 30% of the amount recovered; a dedicated advocate is assigned within 24 hours.
Worked example (hypothetical)
A Varanasi saree wholesaler's khata shows a Patna retailer owing ₹6,40,000. For the notice, the advocate ties each of the nine open invoices to its e-way bill and transporter receipt, matches the ₹18,60,000 of payments in the year to the bank statement, and attaches a balance confirmation of ₹5,10,000 signed by the retailer six months earlier (the later ₹1,30,000 of supplies are proved by e-way bills). The retailer's reply disputes nothing but asks for time. The ₹6,40,000 is paid in three instalments; had it gone to court, the signed confirmation and e-way bills would have supported a summary suit.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.