Delhi High Court Protects Bona Fide Buyers from Seller’s Tax Default

Suvasini Charitable Trust Vs Government of NCT of Delhi & Anr (Delhi High Court)

The Delhi High Court, in the case of Suvasini Charitable Trust Vs Government of NCT of Delhi & Anr, has delivered a significant judgment addressing the denial of Input Tax Credit (ITC) to purchasing dealers due to the failure of selling dealers to deposit the collected tax with the government. The Court concluded that Section 9(2)(g) of the Delhi Value Added Tax (DVAT) Act, 2004, cannot be used to penalize bona fide purchasers for the defaults committed by the selling party.

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