Bona fide purchases cannot be disallowed merely for seller default; Tribunal must record findings on all material issues.

The Tribunal's reversal of the first appellate authority was unsustainable because it failed to record findings on all material grounds, including the survey-related contention, and treated the assessee's purchases as from an unregistered dealer merely because the seller did not disclose the sales in its return. As the final fact-finding authority, the Tribunal was required to decide the material issues before disturbing the earlier order. The note also states that bona fide purchases from a registered selling dealer cannot be disallowed solely for the seller's failure to deposit or disclose tax, absent collusion. The order was set aside and the matter remanded for fresh decision on merits in accordance with law.

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Issues: Whether the Tribunal's order, which reversed the first appellate authority by holding the assessee's purchases to be from an unregistered dealer merely because the selling dealer did not disclose the sales in its return and without recording findings on all grounds, could be sustained.

Analysis: The revision arose under Section 58 of the U.P. Value Added Tax Act, 2008. The Tribunal had dealt only with one ground urged in the departmental appeal and had not returned any finding on the survey-related contention. It also concluded that the assessee's purchases were from an unregistered dealer solely on the basis of the selling dealer's omission in its return. As the final fact-finding authority, the Tribunal was required to record specific findings on the material issues before disturbing the order of the first appellate authority. The decision also noted the principle that bona fide purchases from a registered selling dealer cannot be disallowed merely because the seller failed to deposit or disclose tax, in the absence of collusion.

Conclusion: The Tribunal's order was held unsustainable and was set aside. The matter was remanded to the Tribunal for a fresh decision on merits in accordance with law.

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