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TMI Blog2021 (7) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to as 'the Tribunal' for short) dated 19.09.2018 passed in S.T.A.No.895/2016. The respondent is a Proprietor and a dealer registered under the provisions of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as 'K.V.A.T. Act' for short) and is engaged in the business of trading in Iron and Steel. During the tax period April 2011 to March 2012, the respondent had filed its returns and claimed Input Tax Credit (hereinafter referred to as 'ITC' for short) on the purchases made from the registered dealers. The Assessing Authority passed a reassessment order dated 30.05.2014 disallowing the ITC claimed in respect of the purchases from three dealers, on the ground, that the said three dealers were non-existent but bogus deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dealers. He also contended that the provisions of the Act give a free hand to the department to proceed against the purchasing dealers or the selling dealers or both, when it is found that the tax paid by the purchasing dealer is not actually deposited by the selling dealer with the Government or has not been lawfully adjusted against the selling dealers input tax liability and or is not correctly reflected in the return filed by such selling dealer in the respective tax periods. 4. Per contra, learned counsel for the assessee submitted that there was no reason as to why the transaction entered into by the assessee with the dealers could be termed as bogus. He brought to our attention the fact that the assessee is in possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t merely because the selling dealers have failed to deposit the VAT collected from the assessee, the transaction itself is bogus and is designed to claim ITC. A similar question fell for consideration before this Court in STRP No.82/2018. This question is no longer res-intigra in view of the judgment of the Hon'ble Apex Court in the case of CORPORATION BANK VS. SARASWATI ABHARANSALA AND ANOTHER reported in (2009) 19 VST 84, where the Hon'ble Supreme Court held: "Para 48. The decision of the Supreme Court in Corporation Bank (supra) applies to the present case on all fronts. The Court explained there that the selling dealer collects tax as an agent of the Government. Therefore, the bona fide buyer cannot be put in jeopardy when he was done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one all that the law expects him to comply. The purchasing dealer has no means to ascertain and secure compliance provisions of the K.V.A.T. Act by the selling dealer. Following the aforesaid exposition of law, this Court in similar circumstances in STRP No.82/2018 has held that the assessee is entitled to claim ITC. In the present case, except contending that the assessee in collusion with the selling dealers have created the invoices to claim ITC, the revenue was not able to establish the same. The assessee has made the payment of the invoice through account payee cheques. Therefore, it cannot be said that the assessee has conspired with the selling dealers to avail the ITC fraudulently. As held above, if the revenue is able to demonstrat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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