The Supreme Court had affirmed the judgment passed by the Delhi High Court in directing the Appellant-Department to grant input tax credit (ITC) benefit to the Respondent-Purchase-Dealers, after finding that the selling dealer was registered on the date of the transaction and neither the transactions nor the invoices in question had been doubted.
A Two-Judge Bench comprising Justice Manoj Mishra and Justice Nongmeikapam Kotiswar Singh observed that the High Court had rightly found that the bona fide purchaser-dealers who had paid taxes in good faith to registered seller-dealers would be entitled to the benefit of ITC and, accordingly, allowed the said benefit to them after due verification of invoices.
The Bench found that on the date of the transaction, the seller-dealers were registered with the Department. However, after the transaction, the registration of those seller-dealers was cancelled, and they defaulted in depositing the tax collected by them from the purchaser dealer(s).
Briefly, the Department had disputed the order, whereby the Delhi High Court had granted the benefit of Input Tax Credit (ITC) to the registered purchaser-dealers (respondents) who had paid taxes to registered seller-dealers in terms of invoices raised by them, alleging that those seller-dealers did not deposit the collected tax with the Government.
Appearances:
Advocates N. Venkataraman, Mukesh Kumar Maroria, Udai Khanna, V.C. Bharathi, B.K. Satija, and Gaurang Bhushan, for the Appellant/ Revenue
Advocate Varinder Kumar Sharma, for the Respondent/ Taxpayer
