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Vat Tax - Whether the Input Tax Credit claimed by the assessee could be rejected by treating the same to be excess tax paid in comparison to the tax actually payable.

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Uttar Pradesh Value Added Tax Act, 2008 - Input Tax Credit is to be restricted to tax paid or actually payable - Whether the Input Tax Credit claimed by the assessee could be rejected by treating the same to be excess tax paid in comparison to the tax actually payable.

 HELD - for the purpose of claiming Input Tax Credit, it is not relevant what was the exact rate of tax payable as per the scheduled rates on the goods purchased by the dealer but under the value added scheme of taxation, it would remain relevant what amount of tax had actually been paid by the assessee on purchase of goods - In absence of any statutory injunction to restrict the claim of Input Tax Credit to the tax actually payable, allowing the revenue to restrict that claim, would be wholly contrary to law - To confine the word 'paid' to the amount that would be payable under the schedule would be to allow violation of the Act by ignoring the word 'or' appearing with the word 'paid' and 'payable' under Section 2(p) of the Act.

Then, Section 13 of the Act clearly allows full amount of input tax to be eligible for input tax credit - Merely because the selling dealer may have acted with abundant caution in realizing the higher amount to avoid any litigation with the State authorities and in absence of any allegation of the assessee had passed on the liability of higher tax paid, the question of law is answered in favour of the assessee and against the revenue.

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Guest Tuesday, 17 September 2019

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