By C. B. Thakar Advocate G. G. Goyal, Janak Vaghani Chartered Accountants
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VAT- Input Tax Credit- Purchase From Registered Dealer-Selling Dealer Did Not Disclose Sales in His Return- Not a Ground For Denial Of Input Tax Credit, section 13(1) of The Andhra Pradesh Value Added Tax Act, 2005
Facts
The petitioner purchased goods from the registered dealer and claimed input tax credit. Subsequently the registration certificate of the selling dealer was cancelled after the date of sale by him to the purchasing dealer but he did not disclose the turnover in his returns. The vat department disallowed the input tax credit claimed by the petitioner on the impugned purchases on the ground that the turnover of sales is not declared by selling dealer in his returns and raised ademand . The petitioner filed a writ petition before the Andhra Pradesh High Court against the said assessment order.
Held
Section 13(1) of the Act entails input tax credit to the VAT dealer for the tax charged in respect of all purchases of taxable goods, made by that dealer during the tax period. It is not disputed that the registration of the selling dealer was cancelled after the transaction in question occurred. The failure on the part of the selling dealer to file returns or remit the tax component of the sale made to the petitioner dealer cannot per se be a ground for denial of input tax credit. Accordingly, the High Court quashed the order of assessment and it was made open to the vat department to pass revised order if there be material on the basis of which the input tax credit can be denied except on the ground that the selling dealer, despite being a registered dealer on the relevant date, did not remit the tax. The writ petition was allowed by the High Court.
