Claim of Input Tax Credit, if the sellers found non existing

HIGH COURT OF KARNATAKA

M/S. MILAN PLYWOOD SUPPLIERS

VS.

STATE OF KARNATAKA

Date of order- 10^th July, 2014

Mere existence of tax invoice does not ipso facto lead one to the conclusion that the goods had been sold to the assessee – Assessing Authority should have made an enquiry to find out the genuineness of the transaction as set out by the Tribunal. It is only after such enquiry if the Assessing Authority is satisfied that the transaction in question is genuine one, the assessee has paid the money, he has received the goods and necessary entries are made in the books of accounts of the assessee, then merely because of the dealer has not remitted the tax would not enable the Assessing Authority to deny the benefit to the assessee. 

For full text of the judgment-  Please click here