Vat
MOHAMMED IQBAL
(Querist) 25 February 2012
This query is : Resolved
hello all of you experts
i am samll bussiness man in dealing old teak wood pls let us know my uery are follows
in fincinal year 2009-2010 we purchased old teak wood from local market for rs.18,15,189.00 input vat tax is 72,608.00
we take setoff in year 2009-2010
right now we received a notice from department that your purchaed party is not sold goods to you but intead only false bill issued so you can pay above amount
i want to know that after three years later department give me notice to pay as a such amount so pls advice its better to pay amount or go to appleal
V R SHROFF
(Expert) 25 February 2012
go for appeal, Delay is on their part.
not your fault, that seller did not keep a/c .
Raj Kumar Makkad
(Expert) 25 February 2012
It is better to file an appeal rather to surrender before the illegal demand of the department at such belated stage.
C. P. CHUGH
(Expert) 25 February 2012
In case you belong to Haryana, recently their Lordships at Punjab & Haryana High Court in a Land Mark judgement pronounced that "Innocent purchaser cannot be disallowed Input Tax Credit (ITC) for non payment of tax by seller". A copy of full Judgement is attached for ready reference, even otherwise, please check the conditions precedent to claim input tax xunder local vat law. In most of the States input credit is available on furnishing of such documentary evidence like Tax Invoice and VAT C-4 in Haryana, similiary please check what are the requirement prescribed under the Law for availing input tax credit and whether you have fulfilled those conditions or not. In case you have satisfied the requirement of law, the credit cannot be disallowed merely on the basis of statement of the seller that either he has not sold the goods to you or the seller has not deposited the tax collected from you.
Hope this helps you.
R Trivedi
(Expert) 28 February 2012
Can you please elaborate, the meaning of false bill in this case. There are two possibilities:
1. Your seller has not deposited the Tax on a genuine bill.
2. Your seller raised a bogus bill to you.
Bogus bill here means, that there is no Tin number of seller or not properly signed or some different details that what is registered with the sales tax department.
In case #1, your liability is nil, but in case #2 when the bill itself is illegal, then department can deny the tax credit to you. Your remedy is criminal case against seller for fraud.
R Trivedi
(Expert) 28 February 2012
There is a well settled law, if you are duped, then court cannot side with you, it may sympathize. So, if the bill is bogus, and even if you had no means to find out that the bill was bogus, court will not side with you. Please find out what is department saying about the bill and talk to your seller also, before proceeding.
