ITC availed by buyer cannot be reversed for non payment of tax by seller

Vinayaga Agencies Vs Assistant Commissioner (CT) (Madras High Court) Hon’ble High Court held that the authority does not have the jurisdiction to reverse the input tax credit already availed by the assessee on the ground that the seller has not paid tax. In this case the petitioner was dealer in lubricants, purchasing lubricants from a registered dealer. On inspection, it was found that the vendor / dealer had not filed monthly returns nor paid tax to the Department. Though the petitioner had paid tax to the selling dealer, revision notice was issued proposing that the ITC should be rev...