No ITC for Dealer on Tax-Exempt Sales: Supreme Court Upholds Disallowance u/s 7(c) of UP VAT Act

The Supreme Court upheld the disallowance of Input Tax Credit (ITC) for a dealer on tax-exempt sales under Section 7(c) of the Uttar Pradesh VAT (Value Added Tax) Act. The apex court affirmed the principle that ITC is typically available only for taxes paid on inputs used for making taxable supplies. Dealers making tax-exempt sales are generally not entitled to claim ITC on the inputs used for those sales.