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2020 (4) TMI 141 - HC - VAT and Sales TaxInput tax credit - Denial of ITC in the hands of purchasing dealer or recovery from the seller for failure to deposit the tax - right to claim input tax credit against his out put tax credit under the provisions of 19(1) of the Act - HELD THAT:- Prior to amendment and substitution of proviso under Section 19(1) of the Act, with effect from 29.1.2016, the period in question, is covered by the pre-amendment position of law and since the proviso (1) to section 19, which is prior to 29.1.2016, only requires the registered dealer namely, the purchasing dealer to establish that the tax due on such purchase has been paid by him in the manner prescribes, this fact was duly proved by the purchasing dealer in the present case and the assessing authority himself has noted the said fact, therefore, there was no question of denying the input tax credit in the hands of the purchasing dealer against out put dealer, in terms of 19(1) of the Act, as it stood for the period in question 2009-2010. Such giving of input tax credit in the hands of purchasing dealer, however does not deprive Revenue authorities to proceed against the selling dealer M/s Tvl.Classic Enterprises, to recover the tax paid by the Purchasing dealer. In the present case, for non-deposit of due tax collected form the purchasing dealer M/s.Vinayaga Agencies, the Revenue is therefore free to hold enquiry against the selling dealer and collect the Revenue from the selling dealer, which money in the hands of selling dealer, is held in trust for the State by the selling dealer. It is not the case of the Revenue before us that the selling dealer in the present case is a non- existent or a ghost dealer. The identity and registration of the selling dealer and the fact that he collected the tax from the purchasing dealer in question are duly proved on record and are not disputed. The respondent are directed to allow the ITC in the hands of purchasing dealer under Section 19(1) of the Act - appeal dismissed.
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