2022 (2) TMI 1164 - HC - VAT and Sales Tax

Input Tax Credit - benefit of input tax credit granted to the dealer without verifying the nature of transaction as discussed by the assessing authority as well as by the first appellate authority - HELD THAT - The issue involved in the revisions is covered by the judgement and order passed by this Court COMMISSIONER COMMERCIAL TAX LKO. VERSUS S/S VIKRANAT ISPAT UDYOG 2022 (2) TMI 1116 - ALLAHABAD HIGH COURT , in which it was held that The Tribunal being the last court of fact has recorded the finding of fact in favour of the opposite party that all the transactions were made through Bank and were duly accounted for as well as verified. Further, the purchases made from the respective dealers were duly registered and verifiable from the official web site of the Department and therefore, it cannot be said that purchases were made from unregistered dealers. The present revisions are dismissed.

Summary

Issues:
1. Granting benefit of input tax credit without verifying the nature of transactions.
2. Disbelief of purchases made by dealer from unregistered dealer.
3. Verification of purchases made through registered dealer.
4. Legal justification for granting input tax credit.

Analysis:

1. The primary issue in this case was whether the Commercial Tax Tribunal was legally justified in granting the benefit of input tax credit to the dealer without verifying the nature of the transactions. The Assessing Authority initially rejected the claim of input tax credit against purchases made from unregistered dealers. The first appellate authority remanded the matter, and the Tribunal later allowed the input tax credit after verifying that all transactions were made through registered dealers and payments were made through banks. The Court found that the Tribunal's decision was based on verified information and dismissed the revisions accordingly.

2. Another issue involved the disbelief of purchases made by the dealer from unregistered dealers by the Assessing Authority. The purchases were treated as made from unregistered dealers, leading to the rejection of the input tax credit claim. However, the Tribunal verified the purchases and found that they were made from registered dealers, which was further supported by the official website records. The Court upheld the Tribunal's findings and dismissed the revisions based on the verified information.

3. The verification of purchases made through registered dealers was a crucial aspect of the case. The Tribunal confirmed that all transactions were made through registered dealers, and payments were made through banks, which were duly accounted for and verified. This verification process played a significant role in establishing the legitimacy of the purchases and supporting the dealer's claim for input tax credit. The Court, after reviewing the facts and circumstances along with previous legal precedents, found no reason to interfere with the Tribunal's order.

4. The legal justification for granting input tax credit was a key consideration throughout the judgment. The Court emphasized the importance of verifying the nature of transactions and ensuring that purchases were made from registered dealers. The Tribunal's role as the final court of fact was crucial in establishing the legitimacy of the transactions and supporting the dealer's claim for input tax credit. The Court's decision to dismiss the revisions was based on the verified information and the law laid down by previous judgments, reinforcing the importance of factual verification in tax-related matters.