Jyoti Electronics (the Respondent) purchased certain goods after payment of Input Tax credit. Thereafter, manufacturer of the goods granted trade discount on the goods purchased during the Assessment Year 2008-09 of an amount of Rs.9,60,183/-. The Respondent claimed Input Tax credit on the invoice value of the goods, however sold the goods to the consumers at value lower then invoice value of purchases.
The Assessing Officer alleged that the Respondent has claimed Input Tax credit on the higher side than the ultimate sale value to the consumers and accordingly levied differential tax.
The Hon’ble High Court of Rajasthan held that the Department is not allowed to interfere in the affairs of the Respondent even if goods are sold at loss. The VAT laws have not debarred the assessee to sell the goods below the invoice price. Once the whole seller has issued Tax invoice to purchaser of goods, then the Input Tax credit is allowable as per said invoice alone.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)