Input tax credit on unpaid purchase tax was denied because the tax had not been actually paid.

Input tax credit was not admissible on purchase tax payable under Section 19 of the Punjab Value Added Tax Act, 2005 where the tax had admittedly not been actually paid. The analysis proceeded on the basis that a purchase tax liability existed, but unpaid tax could not be treated as a valid basis for credit in computation. On that footing, the credit claim failed and the issue was decided against the assessee.

---

---

Issues: Whether input tax credit could be granted on purchase tax that was payable under Section 19 of the Punjab Value Added Tax Act, 2005 but admittedly not actually paid.

Analysis: The claim for input tax credit was examined on the footing that purchase tax liability under Section 19 existed, but the amount had not in fact been paid by the assessee. On that premise, the benefit of input tax credit could not be allowed for computation purposes because unpaid tax cannot form the basis of credit.

Conclusion: Input tax credit on the unpaid purchase tax was not admissible, and the issue was decided against the assessee.

---