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TMI Blog2013 (4) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the petitioners based on valid documents in the course of sale and purchase of goods, for which tax has been paid cannot be declined. The transaction that took place when the registration certificates of the selling dealer were in force cannot be denied to the petitioners/assessees on the above plea. This is contrary to the law laid down by the Supreme Court in the above stated case. Thus the notices, revised assessment orders and the provisional assessment order to deny the benefit of input tax credit to the petitioners -assessee on the ground that the registration certificates of the selling dealers have been cancelled with retrospective effect, are set aside. - W.P.Nos.12305, 12306, 28739, 26800, 25013, 25014, 25225, 29010 to 29012, and 24656 to 24661 of 2012 and 29929 of 2011 M.P.Nos.1 of 2012 (16 petitions) and M.P.No.2 of 2011 - - - Dated:- 22-11-2012 - MR. R. SUDHAKAR J. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ For Petitioners in W.P.Nos.12305, 12306, 25013 and 25014 of 2012: Mr. P.R. Kumar ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness." 4. Section 3 of the TNVAT Act, 2006 is the charging section on sale of goods. The petitioners in all these cases have purchased goods from registered dealers and availed input tax credit on the amount of tax paid. Subsequently, the department proceeded to take action against the selling dealers, who sold goods to the petitioners, for one or other reason and cancelled their registration certificates. Based on the cancellation of the registration certificates issued to the selling dealers, the department has issued notices in some cases calling upon the petitioners to show cause as to why input tax credit should not be reversed; in some cases passed revised assessment orders reversing the input tax credit availed; and in W.P.No.12305 of 2012, a provisional assessment order has been passed reversing the input tax credit availed. 5. All the petitioners have challenged the notices, revised assessment orders and provisional assessment order on the plea that the reversal of input tax credit is per se erroneous and the basis on which the input tax credit has been reversed or sought to be reversed is based on cancellation of the registration certificates issued to the sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for issuing the notices for reversal of input tax credit or the order revising the assessment is based on the cancellation of the registration certificates of the selling dealers, who sold the goods to the petitioners herein. It is also not in dispute that the registration certificates of the selling dealers have been cancelled with retrospective effect. That appears to be the one and only ground for initiating the action and therefore the challenge. 9. The question now to be considered is whether the cancellation of the registration certificates of the selling dealers with retrospective effect will entitle the department to reverse the input tax credit already availed by the petitioners/assessees consequent to assessment orders passed by competent authority based on records. 10. On the sale and purchase of goods by the registered dealers, in terms of Section 3 of the TNVAT Act, 2006 the tax payable on such sale has been paid and is supported by statutory records like invoices, etc. and the same is not in dispute. At the time when the sale was effected by the selling dealers to the petitioners, the registration certificates were valid. On the basis of the sale documents, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the goods either for own use or for further sale. At the time when the sale was made, the selling dealers had valid registration certificates and the subsequent cancellation cannot nullify the benefit that the petitioners/assessees availed based on valid documents. 13. An almost identical issue was considered by the Supreme Court in State of Maharashtra v. Suresh Trading Company, (1998) 109 STC 439. In that case, the respondents, who were registered dealers under the Bombay Sales Tax Act, 1959, purchased goods during the period from 1.1.1967 to 31.1.1967 from one Sulekha Enterprises Corporation, who is also a registered dealer under the Bombay Sales Tax Act, 1959. The respondents before the Supreme Court resold the goods and claimed certain benefits. That was disallowed by the Sales Tax Officer on the ground that the registration certificate of M/s.Sulekha Enterprises Corporation was cancelled on 20.8.1967, with effect from 1.1.1967. The claim of the respondents therein/the assessees for deduction of the turnover of sales as above was declined and penalty was also imposed. The assessees failed before the appellate authority as well as the Maharashtra Sales Tax Tribunal. The Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the registered dealer to find out whether the registration certificate is valid or cancelled, by stating that such a plea would be against the provisions of the statute. 15. In the present case, it is not in dispute that the registration certificates of the selling dealers have been cancelled with retrospective effect and, therefore, to reverse the input tax credit on the plea that registration certificates have been cancelled with retrospective effect cannot be countenanced. Whatever benefits that has accrued to the petitioners based on valid documents in the course of sale and purchase of goods, for which tax has been paid cannot be declined. The transaction that took place when the registration certificates of the selling dealer were in force cannot be denied to the petitioners/assessees on the above plea. This is contrary to the law laid down by the Supreme Court in the above stated case. For the foregoing reasons, the notices, revised assessment orders and the provisional assessment order, insofar as it seeks to deny the benefit of input tax credit to the petitioners/assessees only on the ground that the registration certificates of the selling dealers have been cancel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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