Case Law Details
Tvl. Lourdes Matha Cashew Industries Vs Union of India (Madras High Court)
Madras High Court held that as GST registration sought from retrospective date, the input tax credit ought to have provided. Accordingly, impugned order directing to forego Input Tax Credit is unreasonable and cannot be sustained.
Facts- The petitioner has engaged in selling of Cashew nuts from the year 1986. Before GST regime, the petitioner was an assessee under Tamil Nadu Value Added Tax (VAT). Subsequently, under the new regime, the petitioner was registered under GST. After registration with GST, the petitioner is bound by GST scheme which is introduced from 01.07.2017. The petitioner is having a Unit in the State of Kerala. The petitioner has completed the process of migration from the VAT to GST in State of Kerala and has also obtained a valid registration under the CGST/KSGST Act. However, when the petitioner was attempting to migrate from VAT to GST in Tamil Nadu, the application was not accepted and the process of migration could not be finalized. The petitioner has advertently omitted to take follow up action in the matter. Thereafter he submitted a letter, dated 16.05.2018 to the 5th respondent pointing out the difficulties. Thereafter, the registration is granted but the validity is granted only from 01.06.2018 though the liability to pay tax has commenced from 01.07.2017.
But the petitioner is claiming to grant it from 01.07.2017 so that the petitioner could avail the benefits of Tax credit and submitted an application to this effect. However, the respondents have issued the impugned notice.
Conclusion- Held that the validity is being granted retrospectively, then the petitioner ought to forgo. It is seen that the petitioner is already as assessee under VAT. The petitioner is seeking to migrate from VAT to GST. Input Tax Credit is available in VAT regime also. In such circumstances the petitioner would have the details and evidence to substantiate his claim of Input Tax Credit and there cannot be difficulty to avail Input Tax credit for the said period. Therefore, the impugned order directing to forego Input Tax Credit is unreasonable and cannot be sustained and the same is liable to be quashed.
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