Law: Sales Tax Act, 1990

Section: 7,11(4),36(3),47A,73

(a) Sales Tax Act (VII of 1990)--- ----Ss.73, 7, 11(4), 36(3) & 47-A---Sales Tax Ruling/instruction No.53/2002, issued by Revenue Division vide letter C. No. 3(36) STP/99(PT-1), dated 13-7-2002---Order Under S.47-A Sales Tax Act, 1990----Sales Tax Ruling/instruction No.5/2004 dated 31-3-2004---Certain transactions not admissible---Payments through crossed travellers cheques---Input tax adjustment was rejected on the ground that payments to the supplier were not made from the business/bank account of the registered person---Registered person contended that payments were made through crossed travellers cheques and the supplier company also confirmed said contention that the said travellers cheques were enchased in their business bank account---Validity---Word "bank" was inserted through Finance Act, 2003 much after the period for which the audit of the registered person was conducted---Language of the provisions before such amendment, indicated the words "business account" and not "business bank account"---Assessing authority erred in considering the "business account" as "business bank account" for the period prior to the insertion of the word "bank" account i.e. 1-7-2003---Payments made to supplier were in accordance with the procedure as provided in the Sales Tax Act, 1990 for the relevant period---Violation of provisions of S.73 of the Sales Tax Act, 1990 even after the Finance Act, 2003, were procedural in nature and the provision was to streamline the transactions of registered person through banks and also to avoid the input tax adjustment from the fake and forged sales tax invoices---Admittedly, the revenue had verified all the invoices provided by the registered person as sales tax return, purchase invoices, bill of entry and purchase register which were declared genuine and no allegation of fraud or bogus invoices had been levelled---Registered person may not be deprived from his legal money due against the government, when there was particularly no mis-statement, forgery, collusion, cheating, fraudulent activity were alleged or any false claim was submitted by the registered person with the view to obtain the illegal gain or causing loss to the…

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