VIOLATION OF CONDITION OF SECTION 3(4) OF TNVAT ACT 2006

As per Section 3(4) of the TNVAT Act 2006, a registered dealer eligible to pay tax at composition rate not exceeding one percent on the second and subsequent sales of goods purchased within the state, subject to fulfilling certain conditions.

Violation of such conditions will make the dealer ineligible under composition scheme. The question here is, when the dealer goes out of the scheme and renders himself open to assessment as a regular dealer, will he be eligible to claim Input tax credit on his local purchases ?