2022 (4) TMI 645

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....al' for short] in STA No.17 to 20/2016 and allied matters. 2. The revision petition has been admitted by this Court to consider the following questions of law: "1. Whether the assessee - Respondent is entitled for input tax credit against the purchase effected from the bogus dealer M/s. Rajguru Impex and Karnataka Metal Stores? 2. Whether on the facts and in the circumstances of the case, the impugned order passed by the Tribunal is sustainable in law?" 3. The respondent - assessee is a partnership firm engaged in the trading of Aluminum profiles and self-adhesive tapes etc., under the name and style of "M/s. Surfaces" and is registered under the provisions of the Act. The respondent has filed returns for the assessm....

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....rt regarding the bill trading activity of the selling dealers namely, M/s. Rajguru Impex and Karnataka Metal Stores having been placed before the Prescribed Authority, the same was considered by the Prescribed Authority while rejecting the input tax claimed by the assessee. This aspect was rightly appreciated by the First Appellate Authority but the Tribunal has allowed the appeal without considering the primary aspect of tax liability not being discharged by the selling dealers. 6. Learned counsel has placed reliance on the judgment of the Co-ordinate Bench decision of this Court in the case of Microqual Techno Private Limited, Bangalore V/s. The Additional Commissioner of Commercial Taxes, Zone-I, Bangalore [2011 (71) Kar.L.J. 10 (HC) ....

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....isfy the authorities that he has purchased the goods from the registered selling dealers who have issued the invoices and collected the tax. The payment of tax by the registered dealer for the transactions effected in terms of the invoices issued by the registered selling dealers would entitle such registered dealer to claim the input tax credit. The Department cannot deny the input tax credit merely for the reason that the selling dealer has not deposited the tax. Action has to be initiated against the selling dealer. The attempt made by the Department in denying the input tax credit as no tax was paid by the selling dealers may not be appreciated for the reason that the entitlement of the claim of input tax credit by the registered dealer....