What if purchaser pays vat and seller does not

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Hardik Raval (Querist)

31 October 2012 What happens to Purchaser if purchaser pays Vat on purchases but seller does not pays vat to the government?

Is there any liability of Purchaser? Please reply asap.

Prakash Kochar

Prakash Kochar (Expert)

01 November 2012 No set off allowable to purchaser, without any tax being received into the Government Treasury. For details Refer Judgement of Bombay High Court in case of M/s.Mahalaxmi Cotton Ginning Pressing and Oil Industries, Kolhapur Vs. The State of Maharashtra & Ors
WRIT PETITION NO.33 OF 2012, judgement Dt. 11-05-2012.

Hardik Raval

Hardik Raval (Querist)

02 November 2012 But sir, how purchaser came to know whether vat paid by him against the invoice is actually deposited by the seller or not?

Prakash Kochar

Prakash Kochar (Expert)

05 November 2012 At present only at time assessment or mismatch statement is received from Dept.

Hardik Raval

Hardik Raval (Querist)

05 November 2012 ok sir but i have another doubt

Hardik Raval

Hardik Raval (Querist)

05 November 2012 Sir, in that case, is their any liability of purchaser if he has paid correct amount of VAT to the seller?

Prakash Kochar

Prakash Kochar (Expert)

05 November 2012 Yes, Till tax amount on transaction is collected in treasury, purchaser will not be entitle for input VAT credit Sect. 48(5).

Hardik Raval

Hardik Raval (Querist)

06 November 2012 Than what purchaser is supposed to do in such situation?

Prakash Kochar

Prakash Kochar (Expert)

06 November 2012 Purchaser has to pay the difference amount with interest, wait & watch for refund as details given in judgement cited in earlier reply. You may also prefer appeal and obtain stay till favorable decision in matter.

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