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Reversal of ITC Merely by Adopting Uniform or Ad-hoc Percentage is unsustainable
Case Law Details
- Case Name
- Sri Ranganathar Valves Private Limited Vs The Assistant Commissioner (CT) (FAC) (Madras High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Madras High Court
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Sri Ranganathar Valves Private Limited Vs The Assistant Commissioner (CT) (FAC) (Madras High Court)
The present Writ Petitions relate to restriction of the amount of Input Tax Credit (ITC) predominantly on the head of (a) Prior sufferance of Taxes; (b) ITC on reversal on wastage; and (c) Ineligible claim of ITC on goods.
High Court states that, Input Tax Credit cannot be disallowed on the ground that the seller has not paid tax to the Government, when the purchaser is able to prove that the seller has collected tax and issued invoices to the purchaser. As such, restriction of the amount of In...
OFFhand:
GiSt of court DECision>
“High Court states that, Input Tax Credit cannot be disallowed on the ground that the seller has not paid tax to the Government, when the purchaser is able to prove that the seller has collected tax and issued invoices to the purchaser. As such, restriction of the amount of Input Tax Credit on this ground, cannot be sustained and requires re-consideration.”
Seemingly is quite logical; and resoning is judicious and sound.
The conclusion reached by the HC has to be commended as unquestionably the right view. Suggest to bear mind , in comparison/ for an analogy, , the provision in the IT Act – sec 205; which, in essence, provides to the effect that if as per the mandated requirement of the Act tax has been deducted at source, – regardless of the tax so decucted is paid to the government or not,- no direct demand could be raised on assessee- i.e. the person from whose income that has been so deductible/deducted.
ANYone with contrary thoughts not to agree ?!?