Law: Sales Tax Act, 1990

Section: 7,8(1)(d),8A,11(2),25,46,73

(a) Sales Tax Act (VII of 1990)-----Ss. 7, 8(1)(d), 8A, 11(2), 25, 46 & 73---Determination of tax liability---Failure to pay tax due, or making short payment and claiming input tax---Registered person/respondent, after verifying the status and genuineness of the supplier, made payments of input tax, and fulfilled all the legal responsibilities on its part---Registered person after adopting of methods of making payments, as prescribed by the law, had discharged its onus---No responsibility lay on the registered person to haunt its supplier depositing their liabilities in the Government Exchequer---Mere allegation that the alleged suppliers were blacklisted, suspended, and false, was not enough and corroborating evidence for denying the lawful right of input tax of the buyer---Duty of the tax functionaries was to check, as to whether the supplier had made payment of tax due to them, especially when he was filing the monthly Sales Tax returns; and summaries of sales and purchase with the department---Registered person, in circumstances, could not be evolved as a joint liable; and induction of contravention did not qualify---Registered person, did all the possible precautions and endeavours, as well as used all the official resource to verify status and genuineness of the suppliers---Registered person, discharged all his legal and the ethical responsibilities to bring the truth at the door in a good faith---All requisite conditions, as were laid down in Ss.7 & 73 of Sales Tax Act, 1990, for claiming input tax were fulfilled in bona fide manner---Representative of the department had failed to produce any order regarding the blacklisting of the suppliers---Impugned show-cause notice, did not disclose that the registered person was in the knowledge, or had reasonable grounds to suspect that some or all the tax payable in respect of supply, would go unpaid---Department had failed to prove the allegation levelled against the registered person that it claimed inadmissible input tax adjustment on the basis of invoices issued by its suppliers, which were blacklisted---Subsequent blacklisting of supplier could not be made tool to deprive the registered person of a…

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