Supreme Court Dismisses SLP to Interfere in Delhi HC Judgement on Input Matching Ruling in Bonafide Cases

By CA Ankit Gulgulia (Jain)

Our Readers would remember our post dated 03rd November, 2017 wherein we wrote about the Hon’ble Delhi HC Ruling where HC had observed that Section 9(2)(g) gave a free hand to Dept. in deciding to proceed either against the purchasing dealer or selling dealer, however, in the situation envisaged by said section, clearly the defaulting party was the selling dealer for which the purchasing dealer was expected to bear the consequence that failure.

HC had observed that Failure by Legislature to distinguish between bona fide and non-bona fide purchasing dealers resulted in Section 9(2)(g) applying equally to both the classes of purchasing dealers, which was certainly hit by Article 14 of Constitution

Now, Hon’ble SC BENCH OF JUSTICE J. CHELAMESWAR & JUSTICE SANJAY KISHAN KAUL on 10-01-2018 has dismissed SLP to Interfere in the Hon’ble HC Judgement.

Download Copy of Order

However, SC grants liberty to Revenue to move the HC with particulars of cases where the purchase transactions are not bona fide, so as to have the matters therein remitted back to the competent authority

Before Parting…

As discussed earlier where the cases of genuine purchases where the seller collects the taxes but does not deposits to the government it is Unconstitutional to make buyer bear the Brunt of such Tax Component in the way of Denial of Input tax credit and penalty to add on to that. Coming Days this Build up can have effect on GST as well as similar provisions exist in GST As well without differentiation in Bonafide / Non Bonafide Cases.

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