Unregistered purchase for vat

Hi Indranil,

Considering the purchase of 1cr, it can be well presumed that the concerned Proprietorship Firm is registered (or atleast REQUIRED to get registerd under VAT), since its turnover will be surely way above the threshold of 5L or 10L (in some states). 

Now, If we suppose that purchase has been made in very small fragments from large number of UNREGISTERD  dealers, purchase tax can be avoided. However, the downside will be ,ITC will be not available as it is bought from Unregistered dealers and above all Purchase tax has not at all been paid.

Now, considering the TO involved in this case, it is in organization's interest to pay purchase tax and to buy goods from registered dealer, so that ITC can be availed.

Note: I have assumed too many things in absence of information.

Please revert back in case you need any further clarification.

Regards