Denial of VAT input credit

[P S SATYA NARAYANA]

Dear Sir,

Can VAT officer deny Input tax credit since the Vendor has not remitted the VAT amount to the Govt.

regards

P S Satyanarayana

 

AI Summary

Haryana Court: Input Tax Credit Can't Be Denied Without Evidence of Fraud or Collusion by Purchaser A forum participant inquired about the denial of VAT input credit when a vendor fails to remit VAT to the government. Responses highlighted that under the Delhi VAT Act, input credit can be denied in such cases, depending on state-specific laws. In Haryana, a court ruled that input tax credit cannot be denied to innocent purchasers unless fraud or collusion is proven. The Punjab & Haryana High Court decision clarified that purchasing dealers should not be penalized for a seller's failure to deposit tax unless there is evidence of collusion. The discussion also referenced relevant cases and laws in Karnataka.