Input tax credit cannot be denied to a purchaser dealer solely because the selling dealer allegedly failed to remit VAT.

Input tax credit could not be denied where the purchaser dealer substantiated the transactions through tax invoices, stock register, sales and purchase accounts, bank statements, cheque realisation details, bank certificates, transport documents and the selling dealers' returns and tax-payment proof. On that material, the Tribunal's finding that the assessee had discharged the burden of proof was not perverse, and a challenge seeking reappreciation of evidence did not raise a substantial question of law. A purchaser who had established payment of VAT to the selling dealer and supporting documents could not be denied credit merely because the seller allegedly failed to remit tax; the Revenue's remedy lay against the selling dealer.

---

---

Issues: Whether the Tribunal's finding that the assessee had discharged the burden of proof for claiming input tax credit was perverse, and whether the purchaser dealer could be denied input tax credit merely because the selling dealer allegedly failed to deposit VAT.

Analysis: The Tribunal had relied on tax invoices, stock register, sales and purchase account, bank statements, cheque realization details, bank certificates, transport documents, returns of the selling dealers, and proof of tax payment by the selling dealers for the relevant tax periods. On that material, the finding that the assessee had fully discharged the burden of proof for input tax credit could not be termed perverse. A challenge that would require reappreciation of evidence did not give rise to a substantial question of law. The purchaser dealer, having established payment of VAT to the selling dealer and the supporting transaction documents, could not be deprived of input tax credit because of any default by the selling dealer in remitting tax to the Government; the Revenue's remedy lay against the selling dealer.

Conclusion: The finding in favour of the assessee was upheld, and the petitions were rejected.

---