Buyer’s ITC Safe if Seller Defaults on Tax: Delhi HC

Meenu Trading Co Vs Commissioner Of Trade & Taxes (Delhi High Court)

In a significant decision providing relief to countless businesses, the Delhi High Court in Meenu Trading Co vs. Commissioner of Trade & Taxes has ruled that a purchasing dealer who acts in good faith cannot be denied Input Tax Credit (ITC) merely because the selling dealer failed to deposit the collected tax with the government. The court found Section 9(2)(g) of the Delhi Value Added Tax (DVAT) Act, 2004, unconstitutional as it failed to distinguish between bona fide and non-bona fide purch

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