Retrospective seller registration cancellation cannot by itself deny input tax credit to a bona fide purchasing dealer.

A purchasing dealer is entitled to rely on the seller's registration certificate while it remains in force, and retrospective cancellation of the seller's registration does not by itself justify denial of input tax credit or imposition of tax, interest, or penalty on purchases made during the registered period. The text states that earlier Rajasthan High Court decisions had already settled this principle, and that no contrary Supreme Court view was shown. It further notes that, on this basis, the revision did not disclose any substantial question of law.

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Issues: Whether input tax credit, tax, interest, and penalty could be denied or recovered from the purchasing dealer merely because the selling dealer's registration was later cancelled or the VAT invoices were alleged to be false or forged.

Analysis: The Court noted that the controversy was already settled by earlier decisions of the same Court, which had applied the principle that a purchasing dealer is entitled to rely on the selling dealer's registration certificate while the registration remains current. Retrospective cancellation of the seller's registration does not, by itself, fasten liability on the purchaser for purchases made during the period when the seller was registered. The Court also found that no contrary view of the Supreme Court was shown, and therefore the issue raised in the revision did not present any substantial question of law.

Conclusion: The issue was answered against the Revenue and in favour of the assessee; input tax credit and the related levy consequences could not be denied on the stated basis.

Final Conclusion: No substantial question of law arose, and the revision failed at the admission stage.

Ratio Decidendi: A purchasing dealer cannot be denied statutory input tax credit, or saddled with consequential liability, merely because the selling dealer's registration is cancelled later with retrospective effect, where the purchase was made when the registration was in force.

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