Case Law Details
Radhikka Ceramic World Vs The State Tax Officer (Madras High Court)
Radhikka Ceramic World petitioned the Madras High Court under Article 226 of the Constitution of India, challenging an order issued by the State Tax Officer dated 23.12.2019, which denied transitional tax remaining unutilized in VAT returns filed for July 2017.
The petitioner, engaged in the sale of ceramic tiles, imported tiles from various states. Due to an apprehension of tax evasion in the tile industry, an advance tax of 20% of the invoice value was levied on the petitioner at the Tuticorin port during import. This advance tax remained unutilized in the petitioner’s VAT returns for June 2017. The petitioner sought to transition this unutilized advance tax under Section 140 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017.
The petitioner argued that there was no basis for denying the transition of unutilized advance tax. Reference was made to a decision by the Madras High Court in Avatar Petro Chemicals Private Limited vs. Goods and Service Tax Council, and a Division Bench decision of the Telangana High Court in Magma Fincorp Limited vs. State of Telangana, which supported the petitioner’s claim.
However, the Additional Government Pleader representing the respondent contended that only input tax credit unutilized as of 30.06.2017 could be transitioned under Section 140 of the TNGST Act, 2017. They argued that the petitioner could, at best, seek a refund of the unutilized advance tax.
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