Travancore Mats and Mattings Pvt Ltd VS Assistant Commissioner

Since the issue raised in these writ petitions is one and the same, with the consent of the learned counsel appearing for both sides, all these writ petitions were heard together and are being disposed of by this common order The petitioner is a dealer under the GST regime For the period from July 2017 to October 2017, i.e., after the GST Act came into effect from 01.07.2017, he had paid 12% of tax for the goods he manufactured or dealt with However, subsequently on advice, he came to know.

The petitioner, a dealer under the GST regime, initially paid 12% tax for the goods he manufactured or dealt with for the period from July 2017 to October 2017 after the GST Act came into effect on 01.07.2017; however, upon subsequent advice, he realized that based on the entry of the goods in question, he only needed to pay 5% tax, so he began paying 5% tax from November 2017 to April 2019 and accordingly filed returns for the relevant assessment years 2017-18, 2018-19, and 2019-20; with the consent of the learned counsel appearing for both sides, all these writ petitions were heard together and are being disposed of by this common order.

The issue raised in these writ petitions is the same, so with the consent of the learned counsel for both sides, all these writ petitions were heard together and are being disposed of by this common order. The petitioner is a dealer under the GST regime and for the period from July 2017 to October 2017, after the GST Act came into effect from 01.07.2017, he had paid 12% of tax for the goods he manufactured or dealt with, however, subsequently on advice, he came to know that based on the entry of the goods in question, he need not pay 12% of the tax and it is only 5%, accordingly he started to pay 5% of tax from November 2017 till April 2019, and accordingly, return was filed for the relevant assessment years 2017-18, 2018-19, and 2019-20, however, in respect of these returns filed by the petitioner/assessee, there has been a notice under Section 61 of the GST Act for scrutiny and the same was replied by the petitioner, despite the reply having been made to the notice under Section 61 of the Act, according to the petitioner, once again a notice for intimating discrepancies in the return, after scrutiny under Section 61 was issued on 07.10.2021, challenging the same, the present writ petitions have been filed, though such a challenge had been made under these writ petitions, during the hearing Mr. Joseph Prabakar, learned counsel appearing for the petitioner, on instructions, would submit that, though a challenge had been made with regard to the notice issued under Section 61 of the Act dated 07.10.2021, the petitioner has accepted the demand or the proposal made by the State Tax Authority i.e., the respondent to pay 12% of the tax for the period from November 2017 to April 2019 i.e., the remaining 7% out of 12% of the tax, as the 5% have already been paid for these periods also.

Since the issue in these writ petitions is the same, all were heard together with the consent of the counsel on both sides and are being disposed of by a common order. The petitioner is a GST dealer and from July 2017 to October 2017 paid 12% tax on the goods he dealt with, later advised that only 5% tax was applicable based on the goods’ entry, so he started paying 5% tax from November 2017 till April 2019 and accordingly filed returns for the relevant assessment years. Despite this, a notice under Section 61 of the GST Act was issued for scrutiny, which the petitioner replied to. However, another notice was issued on 07.10.2021, leading to the current writ petitions. During the hearing, the petitioner accepted the demand to pay 12% tax for November 2017 to April 2019, the remaining 7% out of 12% as 5% had already been paid. The petitioner, initially a partnership firm later converted into a Private Limited Company, changed GST numbers, with the Branch Office in Bhavani, TN having an old number 33AABFT8331N1ZY and a new number 33AAICT0048G1ZM, and the Head Office in Cherthala, Kerala having an old number 32AABFT8331N1ZO and a new number 32AAICT0048G1ZO. The petitioner contends that paying the full 12% tax makes them eligible to claim Input Tax Credit (ITC) from the Head Office to the jurisdictional GST, i.e., the State GST.

The writ petitions under consideration involve a common issue, prompting their joint hearing and resolution. The petitioner, a GST dealer, initially paid a 12% tax rate on goods from July 2017 to October 2017, as per advice received. Subsequently, believing a lower 5% tax rate applied based on the goods in question, the petitioner adjusted payments from November 2017 to April 2019 accordingly. Despite filing returns for assessment years 2017-18, 2018-19, and 2019-20 reflecting this adjustment, scrutiny notices under Section 61 of the GST Act were issued, prompting responses from the petitioner.

Following these responses, another notice highlighting discrepancies was issued in October 2021, leading to the filing of the present writ petitions. During proceedings, the petitioner’s counsel indicated acceptance of the State Tax Authority’s proposal to pay the remaining 7% tax (out of the initially deemed 12%) for the period from November 2017 to April 2019. This decision was influenced by the petitioner’s transition from a partnership firm to a Private Limited Company, necessitating updated GST registration numbers for their branches and head office.

The petitioner contends that settling this tax liability would enable them to claim Input Tax Credit (ITC) through their Head Office in Kerala. In contrast, the State GST, represented by the respondent, argues that the petitioner should have consistently paid a 12% tax rate on the goods in question, noting discrepancies during scrutiny despite the petitioner’s adjusted payments.

The matter hinges on whether the petitioner’s revised tax payments were justified and whether their transition from partnership to a Private Limited Company impacts their tax obligations and eligibility for ITC.

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