Madras HC Sets Aside ITC Denial as Retrospective Cancellation of Vendor Registration Cannot Affect Purchaser

Farwood Industries Limited Vs Assistant Commissioner (CT) (Madras High Court) The Madras High Court considered whether the tax department was justified in levying tax and denying Input Tax Credit (ITC) by rejecting purchases made by the petitioner on the ground that the vendor’s registration certificate had been cancelled retrospectively. The Court noted that the issue was no longer res integra and was squarely covered by the decision of the Supreme Court in State of Maharashtra v. Suresh Trading Company (1998) 109 STC 439 (SC), wherein it was held that retrospective cancellation of a sellin...