S.P. FAIZAL Vs. STATE OF KERALA

JUDGEMENT

(1.) The substantial question of law referred to the Full Bench is whether a purchasing dealer, who has otherwise complied with all statutory requirements, can legitimately be denied the benefit of input tax credit solely on the ground that the selling dealer failed to remit the tax collected.

(2.) W.P(C) No.6733/2019 was filed against the assessment order of the Sales Tax Officer denying ITC to the petitioner on the ground that the seller had not remitted the requisite tax as under the Kerala Value Added Tax Act, 2003 (hereinafter referred to as "KVAT"). A learned Single judge, after considering the view of the Division Bench of this Court in C.P. Rasheed v. State of Kerala [OT Rev. No. 104/2015, decided on 10/8/2018], found that the same runs contrary to the view of the Division Bench of the Delhi High Court in On Quest Merchandising India Pvt. Ltd. v. Government of NCT of Delhi (W.P.(C) 6093/2017), and directed that the matter be placed before a Division Bench to consider whether the matter needs to be placed before a Full bench.

(3.) The registered dealers under the provisions of the KVAT Act, had approached this court by way of writ petitions challenging the denial of input tax credit on certain purchases made from registered selling dealers who, though having issued proper tax invoices and collected the tax component from the petitioner, subsequently failed to deposit the said tax amounts with the government treasury.