2015 (4) TMI 1142 - HC - VAT and Sales Tax

Denial of input tax credit - registration certificate - cancellation with retrospective effect - Held that - the decision in the case of JINSASAN DISTRIBUTORS v. CTO 2013 (4) TMI 615 - MADRAS HIGH COURT apply. Respondent cannot deny the benefit of input-tax credit to the petitioner - writ petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenging assessment orders for multiple years.

Analysis:
The writ petitions were filed against assessment orders for the years 2011-2012, 2012-2013, 2013-2014, and 2014-2015. The petitioner's counsel referred to a previous judgment in JINSASAN DISTRIBUTORS v. CTO, highlighting that the issue raised in the current petitions favored the petitioner. The Additional Government Pleader acknowledged the arguments made by the petitioner's counsel and mentioned that a writ appeal had been filed against the order, which was pending without a stay order.

The crucial issue revolved around the cancellation of registration certificates of selling dealers with retrospective effect. The assessment orders were based on input tax credit availed by the petitioners from registered dealers. The judgment cited a similar case where the Supreme Court ruled that a purchasing dealer is entitled to rely on the registration certificate of the selling dealer, regardless of any retrospective cancellation. Therefore, the cancellation of registration certificates with retrospective effect cannot justify reversing the input-tax credit already availed of by the petitioners. The court held that the respondent could not deny the benefit of input-tax credit to the petitioner based on the legal principles established by the Supreme Court. Consequently, the writ petitions were allowed, citing the precedent set by the court and the Supreme Court. No costs were awarded, and the related miscellaneous petitions were closed.