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2013 (4) TMI 615 - HC - VAT and Sales TaxInput tax credit denied - registration certificates of the selling dealers have been cancelled with retrospective effect - TNVAT Act, 2006 - Held that:- Retrospective cancellation of the registration certificate of the selling dealer can have no effect on the person who acted upon the strength of the registration certificate when it was in force. The Supreme Court in State of Maharashtra Versus Suresh Trading Company [1996 (2) TMI 451 - SUPREME COURT OF INDIA] had rejected the department's argument that duty is cast on the person who is dealing with the registered dealer to find out whether the registration certificate is valid or cancelled, by stating that such a plea would be against the provisions of the statute. As in the present case, it is not in dispute that the registration certificates of the selling dealers have been cancelled with retrospective effect and, therefore, to reverse the input tax credit on the plea that registration certificates have been cancelled with retrospective effect cannot be countenanced. Whatever benefits that has accrued to the petitioners based on valid documents in the course of sale and purchase of goods, for which tax has been paid cannot be declined. The transaction that took place when the registration certificates of the selling dealer were in force cannot be denied to the petitioners/assessees on the above plea. This is contrary to the law laid down by the Supreme Court in the above stated case. Thus the notices, revised assessment orders and the provisional assessment order to deny the benefit of input tax credit to the petitioners -assessee on the ground that the registration certificates of the selling dealers have been cancelled with retrospective effect, are set aside.
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