Court Questions Disallowance of ITC After Supplier Overcharges VAT; Examines Legislative Intent to Prevent Tax Cascading Effect.

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....Reversal of excesss input tax credit (ITC) - supplier of goods paid VAT @12.5% instead of 4% - there was deliberate ploy on the part of the dealer who sold the capital goods to the petitioner by charging tax at 12.5% to liquidate accumulated credit - But, there is no reason why credit availed by the petitioner should be disallowed particularly in the light of the fact that intention of the legislature is to reduce the cascading effect of the tax the final product.....