VAT Dealers Duty Bound to Reverse/Debit ITC u/s 13(6) After Business Discontinuation by Law: Allahabad HC

The Allahabad High Court ruled that VAT dealers are duty-bound to reverse the debit of Input Tax Credit (ITC) under Section 13(6) of the UP VAT Act after the discontinuation of their business by law. The court clarified that the provision mandates the reversal of ITC on stock held at the time of business closure due to legal reasons. The failure to reverse such ITC would amount to an undue benefit to the dealer. This judgment emphasizes the statutory obligation of VAT dealers to comply with the reversal provisions upon cessation of business as per the law.