The respondents who were registered dealer under the Bombay Sales Tax Act, 1959 (BST Act) purchased goods from one M\/s Sulekha Enterprises who were also registered under the BST Act. The said supplier issued an invoice with a certificate that his RC was in force on the date of sale. The respondent effected resale of the same goods based on this certificate. The assessing officer disallowed\u00a0 the claim of resale on the ground that RC of the supplier was cancelled from a retrospective date which was prior to the date of purchase. He also levied penalty. The first appellate authority and Tribunal upheld the disallowance but Tribunal deleted the penalty.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The Supreme Court concurred with the\u00a0 High Court decision that the\u00a0 rights of the purchaser are not affected by subsequent cancellation of RC though with retrospective effect. A purchasing dealer is entitled by law to rely upon the certificate of registration of the selling dealer and to act upon it. Whatever may\u00a0\u00a0\u00a0\u00a0\u00a0 be the effect of a retrospective cancellation upon the selling dealer, it can have\u00a0\u00a0\u00a0\u00a0\u00a0 no effect upon any person who has acted upon the strength of a registration certificate when the registration was valid and in force.. The argument on behalf\u00a0\u00a0 of the department that it was the duty of persons dealing with registered dealers\u00a0\u00a0\u00a0 to find out whethera state of facts exists which would justify the cancellation<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
of registration; must be rejected. Accepting such argument would only lead to modifying the provisions of law.<\/p>\n
\u00a0<\/p>\n
The resale claim in the hands of the purchaser is allowable. Cancellation of RC\u00a0\u00a0\u00a0\u00a0 \u00a0of the seller subsequently from an anterior date would not change the rights of\u00a0\u00a0\u00a0 the purchaser. [CA No. 1506 of 1982 dt. 7.2.1996]<\/p>\n
Editorial<\/em><\/strong>: The decision has not considered any equivalent provision like\u00a0 sec. 48(5)\u00a0 of the MVAT Act, 2002 wherein actual payment of tax into the Govt. treasury is quintessential to claim set off on the purchases. Mere certificate of the supplier whose RC is cancelled would not suffice. The case related to the claim of resale which was not liable to tax under section 8 of the BST Act.<\/p>\n Under CGST\/SGST Act too, section 16(2)(c) stipulates that input tax credit (ITC)\u00a0\u00a0\u00a0 is not admissible unless the tax charged on the inward supply is actually paid to the credit of appropriate Govt. either through cash or through eligible ITC. Ratio\u00a0\u00a0\u00a0 of this judgement may be useful in cases where the supplier has not uploaded\u00a0\u00a0\u00a0\u00a0 the sale invoices in his return for outward supplies.<\/p>\n \u201cAn eye for an eye only ends up making the whole world blind.\u201d<\/em><\/p>\n – Mahatma Gandhi<\/p>\n","protected":false},"excerpt":{"rendered":" Bombay Sales Tax Act, 1959
\nS. 25: Registration – Retrospective cancellation of Registration- Rights of purchaser – Registration certificate (RC) of supplier in force at the time of purchase – RC cancelled thereafter with retrospective effect-assessing officer disallowed the resale claim of same goods – Rights of the purchaser are not affected by subsequent cancellation of Registration certificate – Resale claim is allowable<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":["post-12973","post","type-post","status-publish","format-standard","hentry","category-gst-law"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3nf","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=12973"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12973\/revisions"}],"predecessor-version":[{"id":12974,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12973\/revisions\/12974"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=12973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=12973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=12973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}