SC Upholds the ITC benefit of VAT Credit to genuine purchaser even if tax not paid by the Supplier
Supreme Court dismisses the Revenue’s appeal against the Delhi HC ruling which allowed the benefit of VAT ITC even if tax not paid by the seller.
The High Court held that in the event that the selling dealer has failed to deposit the tax collected by him from the purchasing dealer, the remedy for the Department would be to proceed against the defaulting selling dealer to recover such tax and not deny the purchasing dealer the ITC.
Although Judgement pertains to VAT Regime but would have equal precedential value in GST. The Apex Court held that
“In light thereof, as we find that there is no dispute regarding the selling dealer being registered on the date of transaction and neither the transactions nor invoices in questions have been doubted, based on any inquiry into their veracity, we do not find a good reason to interfere with the order of the High Court directing for grant of ITC benefit after due verification. The appeals lack merit and are, accordingly, dismissed.
The copy of the order is as under:
