Delhi HC on DVAT: ITC Can’t Be Denied for Seller’s Default

Mahan Polymers Vs Commissioner of Vat & Anr (Delhi High Court)

Delhi High Court, in a significant ruling in the case of Mahan Polymers vs. Commissioner of VAT & Anr, has held that Input Tax Credit (ITC) cannot be denied to a bona fide purchasing dealer if their selling dealer fails to deposit the collected tax with the government. The court found that Section 9(2)(g) of the Delhi Value Added Tax (DVAT) Act, 2004, which allowed for such denial, was arbitrary and violated Article 14 of the Constitution for failing to distinguish between genuine and non-genuine purchase

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