Case Law Details
Sri Sasthaa Constructions Vs Assistant Commissioner (ST) (Madras High Court)
Madras High Court held that valid ITC availed on purchase tax which remained unutilized is entitled for the transitional credit under section 140 of TNGST Act, 2017
Facts- The petitioner is a Works Contractor. The employer who had employed to the petitioner as a Works Contractor had deducted Tax Deducted at Source (TDS) amount u/s. 13 of the Tamil Nadu Value Added Tax Act, 2006 and this Tax Deducted at Source was transitioned under Section 140 of the TNGST Act, 2017, along with the “purchase tax” paid by the petitioner, which was availed as Input Tax Credit. Petitioner mainly alleged that tax transmitted was wrongly denied by the respondent vide the impugned Assessment Order dated 27. 04.2021.
Conclusion- If ITC was validly availed by the petitioner on “purchase tax” paid by the petitioner under Section 12(1) of the TNVAT Act, 2006 and same was remaining un-utilized, the petitioner was entitled to transition the same under Section 140 of the TNGST Act, 2017 as transitional credit.
Held that the petitioner therefore deserves a chance to defend the case as the impugned Assessment Order has been passed during the period when the country was under semi-lock down mode. If the VAT-TDS had indeed remained unutilized for discharging tax liability under TNVAT Act, 2006, there should be a fresh adjustment of the amount out of VAT-TDS towards tax liability of the petitioner and thereafter ITC which would have remained unutilized ought to have allowed to be transitioned under Section 140 of the Act or refunded to the petitioner under Section 54 of the TNGST Act, 2017 read with TNVAT Act, 2006.
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