Delhi HC shields bona fide purchasers from ITC denial due to seller’s tax default

Arun Jain (HUF) Vs Commissioner (Delhi High Court) In a significant judgment, the Delhi High Court addressed the issue of Input Tax Credit (ITC) denial to purchasers when selling dealers fail to deposit Value Added Tax (VAT) with the government. The case, Arun Jain (HUF) Vs Commissioner, closely examined Section 9(2)(g) of the Delhi Value Added Tax (DVAT) Act, which allowed authorities to initiate proceedings against both buyers and sellers for unpaid tax. The Court’s decision primarily aims to protect purchasers who have diligently followed tax procedures. VAT, as defined by Section 2(...