Commissioner of Trade & Taxes v. Arise India Ltd. & Another

The dispute in Commissioner of Trade & Taxes v. Arise India Ltd. & Another arose under Section 9(2)(g) of the Delhi Value Added Tax Act, 2004 (DVAT Act). The provision denied a purchasing dealer the benefit of Input Tax Credit (ITC) if the selling dealer failed to deposit the tax collected with the Government.

Arise India Ltd., a bona fide purchasing dealer, had purchased goods from registered dealers, received valid tax invoices, paid the purchase consideration including VAT in good faith, and claimed ITC in accordance with the DVAT Act. Subsequently, the Department issued show-cause notices proposing reversal of ITC on the ground that the selling dealers had failed to deposit the tax collected from the purchasers into the Government treasury.