2012 (11) TMI 1041 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of law regarding denial of input tax credit based on retrospective cancellation of registration certificates.

Summary:

The High Court of Madras, in a judgment delivered by Justice Sudhakar, considered the issue of denial of input tax credit due to the retrospective cancellation of registration certificates of selling dealers. The court referred to a previous order in a related case and held that reversing input tax credit based on such cancellations is not permissible. The court emphasized that benefits accrued based on valid documents during the transactions cannot be denied to the petitioners. The judgment highlighted that the transactions conducted when the registration certificates were valid should not be disregarded due to subsequent cancellations. The court set aside notices, revised assessment orders, and provisional assessment orders that sought to deny input tax credit on the grounds of retrospective cancellation of registration certificates. The writ petitions were allowed in favor of the petitioners, following the precedent set in the earlier order. No costs were awarded, and connected miscellaneous petitions were closed accordingly.