Dealers discontinuing business before GST implementation cannot carry forward unutilized Input Tax Credit for unsold inventory

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....The HC held that registered dealers who discontinued business on June 30, 2017, with closing stock of unsold goods, were not entitled to carry forward unutilized Input Tax Credit (ITC) accrued under the UP VAT Act into the GST regime. Per s.13(6) of the VAT Act and r.21(1)(y) of the UP VAT Rules, dealers with closing stock must debit unutilized ITC upon business discontinuation. The Court determined that ITC could only be claimed upon fulfilling statutory conditions, including the actual sale of goods. Since the dealers possessed unsold inventory and had effectively discontinued business by operation of law, they were required to debit their ITC rather than carry it forward. The Tribunal's judgment allowing the ITC benefit was set aside and all revisions were allowed.....