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2022 (4) TMI 645 - HC - VAT and Sales TaxInput Tax Credit - purchase effected from the bogus dealer - main ground for rejecting the input tax credit claimed by the assessee is the report said to have been furnished by the Enforcement Officer - periods September 2011, December 2011, February 2012, March 2012 to June 2012 - HELD THAT:- The report of the Enforcement Officer said to have been uploaded in the departmental website alleging the bill trading activity by the selling dealers namely M/s. Rajguru Impex and Karnataka Metal Stores is the foundation for the case on hand. The authorities have not co-related the purchases made by the assessee with the alleged invoices of the selling dealers qua movement of goods. No attempt has been made by the Authorities to verify whether the said transactions based on which the input tax credit claimed was genuine or not. Merely placing reliance on the report of the Enforcement Authority, the input tax credit has been denied as no tax was paid by the selling dealer. Independent application of mind by the Prescribed Authority is sine qua non for taking decision. Further, it is well settled legal principle that the assessee claiming input tax credit is required to satisfy the authorities that he has purchased the goods from the registered selling dealers who have issued the invoices and collected the tax. The Department cannot deny the input tax credit merely for the reason that the selling dealer has not deposited the tax. Action has to be initiated against the selling dealer. The attempt made by the Department in denying the input tax credit as no tax was paid by the selling dealers may not be appreciated for the reason that the entitlement of the claim of input tax credit by the registered dealer cannot be stretched to the extent of compliance made by the selling dealers in depositing the tax amount in full or part thereof. There are no perversity or irregularity in the order of the Tribunal impugned. Accordingly, the substantial questions of law answered in favour of the assessee and against the Revenue.
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