Input Tax Credit Cannot Be Denied to Bona Fide Purchasers If Seller Defaults on Tax Payment: Supreme Court

In a significant ruling protecting the rights of honest tax-paying businesses, the Supreme Court of India, on October 9, 2025, dismissed appeals filed by the Commissioner of Trade and Tax, Delhi against M/s Shanti Kiran India (P) Ltd., affirming that Input Tax Credit (ITC) cannot be denied to bona fide purchaser dealers merely because the seller dealers defaulted in depositing tax with the government. The judgment was delivered by a…