M/S Atul Pumps PVT. LTD vs. The Commissioner Of Commercial Taxes U.P. Lucknow
Held
The Court held that the lower authorities, including the Tribunal, failed to record findings on whether the payments for the purchases were made through banking channels. The subsequent cancellation of the selling dealer's registration did not automatically invalidate the credit when purchases were made against tax invoices prior to cancellation.
Facts
The assessee claimed input tax credit on purchases made from a registered dealer. The dealer's registration was subsequently cancelled after a survey found its premises closed. The authorities disallowed the credit, citing issues with payment and the dealer's alleged sham status.
Key Issues
Whether input tax credit can be disallowed solely on the basis of the subsequent cancellation of the selling dealer's registration without examining the mode of payment and the genuineness of the transaction through banking channels.
AI-generated summary — verify with the full judgment below
Court No. - 28 Case :- SALES/TRADE TAX REVISION No. - 87 of 2019 Applicant :- M/S Atul Pumps Pvt. Ltd Opposite Party :- The Commissioner Of Commercial Taxes U.P.
Lucknow Counsel for Applicant :- Rahul Agarwal Counsel for Opposite Party :- C.S.C.
Hon'ble Rohit Ranjan Agarwal,J.
Heard Sri Rahul Agarwal, learned counsel for revisionist and Sri B.P. Pandey, learned standing counsel for respondent.
Revisionist is a Company engaged in the business of manufacture and sale of PVC pipes, fittings and coolers. For manufacturing PVC pipes the assessee requires resin as a raw material. The dispute relates to the Assessment Year 2013-14 when revisionist had purchased resin worth Rs.3,53,98,511/- from one M/s Shrey Import and Exports, Ghaziabad, which was also a registered dealer. A survey was conducted by SIB team at the premises of M/s Shrey Import and Exports, Ghaziabad on 29.5.2014 and the premises was found to be closed. Registration of the said firm was cancelled on 9.6.2014. After the survey, notice was issued to revisionist for disallowance/reversal of input tax credit of Rs.17,69,927/- claimed by it on account of tax paid on its purchases from M/s Shrey Import and Exports, Ghaziabad.
The judgment continues below.
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