In a recent ruling, the single bench of the Madras High Court quashed the Orders passed by the VAT Authorities reversing Input Tax on ground that selling dealer has not paid taxes/selling dealers registration certificates have been cancelled. The Court, relying upon its earlier decisions, reiterated that the order cannot be sustained on the above reasons.
The main issue raised before the Court was that whether the purchasing dealers can be held liable for non-payment of tax by the selling dealers on account of retrospective cancellation of their registration certificates.
The Court noticed that the issue is squarely covered by the decision of the same Court in a recent case in JINSASAN DISTRIBUTORS v. COMMERCIAL TAX OFFICER (CT), CHINTADRIPET ASSESSMENT CIRCLE,CHENNAI [(2013) 59 VST 256 (Mad)], in which it was held that the retrospective cancellation of the registration certificates issued to the selling dealers cannot affect theright of the petitioners/assessees, who have paid the tax on the basis of the invoices and thereafter claimed the benefit under section 19 of the TNVAT Act, 2006.
Referring to a catena of decisions, the Court further observed that IPTcannot be reversed on ground that the seller has not paid the tax.
Read the full text of the Judgment below.
