The Delhi VAT Tribunal ruled that no penalty can be imposed for mismatch of 2A & 2B if the purchasing dealer is Bonafide.
The appellant, M/s Honeywell Automation India Ltd. has assailed the order of Special Hearing Authority (SOHA) wherein the Input Tax Credit (ITC) was refused to the appellant.
The appellant has referred to the provisions of section 9 of the DVAT Act and then to the decision in Suvasini Charitable Trust v. Government of NCT of Delhi & Another, decided by our own Delhi High Court to submit that Revenue is precluded from invoking section 9(2) (g) of the DVAT to deny ITC to a purchasing dealer who has bonafide entered into a purchase transaction with a registered selling dealer who had issued a tax invoice reflecting the TIN number. Therefore, the contention raised by Counsel for the appellant is that the appeals are allowed and the impugned orders are set aside, and as a result, the appellant is allowed refund of the tax, interest, penalty already deposited under protest.
On the other hand, the Revenue has submitted that section 9(1) of the Act, which provides for the tax credit, is subject to the provisions of sub-section (2) of section 9, and that in view of clause (g) of the sub-section, when the appellant – purchasing dealer failed to justify the mismatch regarding the sale/purchase, as depicted in 2A & 2B, the appeals deserve to be dismissed, and the appellant is not entitled to claim ITC as prayed.
The Coram of Member Narinder Kumar ruled that the Revenue Department was precluded from invoking provisions of section 9(2) of the DVAT to deny ITC to the appellant, purchasing dealer who bonafide entered into a purchase transaction with the registered selling dealer, who in turn issued tax invoice reflecting the TIN number.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
