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2016 (11) TMI 896 - HC - VAT and Sales TaxInput tax credit - payment of tax on purchases - credit claim by registered dealer - Held that: - Sub- Section (16) of Section 19 states that the input tax credit availed of is provisional. It, however, does not empower the authority to revoke the input tax credit availed of on a plea that the selling dealer has not paid the tax. It only relates to incorrect, incomplete or improper calim of input tax credit by the dealer - the Petitioner-dealer, admittedly, had paid the tax to the selling dealer and claimed input tax credit and that was accepted at the time when the self-assessment was made. Even the pre-revision notices and the orders under challenge fairly state that the Petitioner-dealer had paid tax to the dealer. It is, therefore, for the Department to proceed against the selling dealer for recovery of tax in the manner known to law. The provision under which the present action has been initiated, namely, invoking sub-section(16) of Section(19) does not appear to be correct - if the selling dealer has not paid the collected tax and that liability has to be fastened on the selling dealer and it cannot be mulcted on the petitioners-purchasing dealers who had shown the proof of payment of tax on the purchase made. The petitioners already paid 25% of the tax amount - Therefore, the impugned orders are set aside and the matters are remitted back to the authority concerned and the authority shall give one more opportunity of hearing to the petitioner and thereafter pass appropriate orders on the same on merits and in accordance with law within a period of six weeks - petition allowed - decided in favor of petitioner.
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