GST:
Bonafide purchasing dealers should not be denied ITC for non-compliance of selling dealers:
Petitioners argue it is unreasonable to hold purchasing dealers responsible for selling dealers’ failure to deposit collected tax. Delhi High Court precedent (On Quest Merchandising India Pvt. Ltd.) supports the petitioners, ruling that bona fide purchasing dealers should not be penalized for selling dealers’ tax non-compliance.
Supreme Court upheld the Delhi High Court’s decision, protecting purchasing dealers’ rights unless collusion is proven.
[Gauhati HC – National Plasto Moulding Vs State of Assam [WP(C)/2863/2022] ]
