Commissioner of Trade & Taxes, Delhi & Others v. Arise India Ltd. & Others

INTRODUCTION

The dispute in Commissioner of Trade & Taxes, Delhi & Others v. Arise India Ltd. & Others arose under the Delhi Value Added Tax Act, 2004 (DVAT Act) and concerned the constitutional validity of Section 9(2)(g), which denied Input Tax Credit (ITC) to a purchasing dealer where the selling dealer failed to deposit the tax collected from the purchaser into the Government treasury.

The petitioners, including Arise India Limited, had purchased goods from registered dealers and claimed ITC on the strength of valid tax invoices issued by the suppliers. Subsequently, the Department issued default assessment notices seeking reversal of ITC, together with tax, interest and penalty, solely on the ground that the selling dealers had failed to deposit the tax collected from the purchasers. In certain cases, the suppliers’ records were also unavailable due to circumstances such as destruction by fire.