Assistant Commissioner, Commercial Taxes Department Vs Asha Oil Traders A-11 (Rajasthan High Court)
Issues Raised
Whether in the facts and circumstances of the case the Rajasthan Tax Board was justified in law in holding that the respondent cannot be hold responsible for the amount not deposited by the selling dealer and allowed the benefit of Input Tax Credit which ultimately will amount to double jeopardy to the State as the selling dealer has not deposited the tax whereas subsequent dealer has claimed benefit of Input Tax Credit.
Whether in the facts and circumstances of the case the Rajasthan Tax Board was justified in law in deleting the Tax, Interest and penalty despite of the fact that the Input Tax Credit claimed by the petitioner was found to be on the basis of false/forged VAT invoices issued by a dealer who has not deposited the tax and its registration was cancelled u/s 16(4) (g) of the Act.
Argument of Revenue
The argument of learned counsel for the revenue is that in cases where the registered seller is found to have obtained a forged registration as dealer and it is found that such person has not paid any tax to the department, recovery could always be made from the buyer. According to him, not only tax but interest and penalty is also leviable.
Further submission is that Input Tax Credit could not be claimed by the assessee as the same is raised on false/forged VAT invoices issued by the dealer, who never deposited the tax and where registration itself has been cancelled.
Held by High Court
Rajasthan High Court earlier in the case of R.S. Infra-Transmission Ltd Vs State of Rajasthan has held that it will be impossible for the petitioner to prove that the selling dealer has paid tax or not as while making the payment, the invoice including tax paid or not he has to prove the same and the petitioner has already put a summary on record which clearly establish the amount which has been paid to the selling dealer including the purchase amount as well as tax amount. In that view of the matter, we are of the opinion that Rule 18 if it is accepted, then the Sales Tax Department will to take undue advantage and cause harassment.
