Tvl.Moon Labels Vs Government of India (Madras High Court)
If the petitioner was indeed entitled to transition such amounts under Section 140 of the TNGST Act, 2017, such credit may be allowed to be set off against the tax lability as procedural infraction in transitioning the credit should not be denied.
In the case of Tvl. Moon Labels vs. Government of India, the Madras High Court ruled in favor of the petitioner, Tvl. Moon Labels, concerning the transition of input tax credit under the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017. The court addressed the procedural aspects of transitioning unutilized input tax credit from the Tamil Nadu Value Added Tax (TNVAT) Act, 2006 to the GST regime. This ruling highlights the court’s stance on ensuring that procedural infractions do not unjustly prevent the utilization of validly availed tax credits.
The petitioner, Tvl. Moon Labels, challenged an order dated December 27, 2023, issued by the fourth respondent concerning the Assessment Year 2017-2018. The petitioner also sought to quash Notification No. 09/2023-Central Tax, dated March 31, 2023, issued by the first respondent. However, the petitioner’s counsel withdrew the request to quash the notification during the proceedings.
The dispute arose during the initial implementation year of the GST enactments, starting July 1, 2017. The petitioner claimed to have unutilized input tax credit under the TNVAT Act, 2006, as of June 30, 2017. The petitioner intended to transition this credit into the GST regime as per Section 140 of the TNGST Act, 2017.
