Pragal Associates VS Assistant Commissioner

These two writ petitions have been resolved jointly. The petitioner contested against communications from the respondents, dated 18.12.2017 and 20.12.2017. In the respective writ petitions, these communications were deemed objectionable. The petitioner sought legal recourse to challenge their validity. After a thorough examination of the petitions and relevant documentation, the court has reached a decision.

The writ petitions in question challenge two communications issued by the respondents on December 18, 2017, and December 20, 2017, respectively. These communications are virtually identical and pertain to M/s.Pragal Associates and M/s.Pure Plastics, registered dealers under VAT and GST. The communication dated December 18, 2017, addressed to M/s.Pragal Associates, asserts that they reported an excess tax credit of Rs.13,82,386/- in their VAT returns for June 2016. The dealer is directed to submit all relevant books of accounts and invoices up to June 2017 for verification before availing this excess credit under GST. Additionally, the dealer is instructed not to avail any transitional credit under GST without the approval of the proper officer. They are given until December 22, 2017, to produce the necessary documents, failing which the excess Input Tax Credit (ITC) will be reversed, and any attempt to adjust the excess credit under GST will also be reversed.

Similarly, the communication dated December 20, 2017, addressed to M/s.Pure Plastics, outlines similar directives regarding excess tax credit under VAT and the submission of relevant documents for verification before availing the credit under GST. They are also warned against availing transitional credit under GST without proper approval. The deadline for document submission is not explicitly mentioned in this communication.

In summary, both communications challenge the reported excess tax credit under VAT, mandate the submission of relevant documents for verification, and caution against unauthorized availing of transitional credit under GST. The petitions seek to challenge the validity of these communications.

Two writ petitions are being disposed of, both challenging nearly identical communications from the respondents dated 18.12.2017 and 20.12.2017. In W.P.No.10541 of 2019, the communication pertains to M/s.Pragal Associates, a registered dealer under VAT and GST, regarding an excess tax credit reported for June 2016 under VAT. The dealer is directed to produce all relevant documents for verification before availing the credit under GST. A similar communication is issued in W.P.No.10543 of 2019 to M/s.Pure Plastics, another registered dealer, regarding excess tax credit reported for the same period. Both dealers are instructed not to avail transitional credit under GST without approval. They are given until 22.12.2017 to produce documents, failing which the excess credit will be reversed. The petitioners claim that they didn’t receive responses from the respondents, preventing them from transitioning the credit, leading to the filing of these writ petitions seeking relief.

The case at hand revolves around two writ petitions challenging communications from the respondents, both dated December 18, 2017, and December 20, 2017, respectively. These communications, nearly identical in content, were issued to M/s.Pragal Associates and M/s.Pure Plastics, registered dealers under VAT and GST in Puducherry. The communications addressed an excess tax credit reported in their returns under VAT for June 2016, instructing them to produce books of accounts and invoices for verification before availing the credit under GST by filing TRAN 1. Additionally, they were directed not to avail any transitional credit without the approval of the proper officer under GST.

The petitioners contend that despite the notice, they were unable to transition the credit as they did not receive a response from the respondents regarding the requested documents. Consequently, they filed these writ petitions seeking relief.

In opposition, the respondents’ counsel argues that the petitioners were advised to furnish documents and refrain from filing TRAN – 1 without approval. Since the petitioners failed to provide the documents in time, no order was passed. Moreover, the counsel asserts that nothing prevented the petitioners from filing TRAN – 1 on the GSTIN portal by December 27, 2017. As they missed this deadline, their credit was blocked by the respondents.

Upon considering the arguments from both sides, the court notes that the Pondicherry GST Act did not prohibit the transition of input tax credit from returns under the Pondicherry Value Added Tax Act. However, due to the impugned communications, the petitioners failed to file TRAN-1 by the deadline. Despite this, the court would need to examine the legality and implications of blocking the credit by the respondents.

The court disposed of two writ petitions that challenged nearly identical communications from the respondents dated 18.12.2017 and 20.12.2017. These communications were directed at M/s.Pragal Associates and M/s.Pure Plastics, both registered dealers under VAT and GST in Puducherry. The communications instructed the dealers to produce their books of accounts and other records for verification before availing excess tax credits under GST. Failure to comply would result in the reversal of excess tax credits.

The petitioners claimed they couldn’t transition the credit because they didn’t receive responses from the respondents. The respondents argued that the petitioners were advised not to file TRAN – I without approval and had ample time to do so but failed to meet the deadline. Consequently, the respondents blocked the credit.

The court considered arguments from both sides and noted that while the Pondicherry GST Act didn’t prohibit transitioning input tax credit from the VAT returns, the petitioners failed to file TRAN-1 by the due date. Even if they had filed on time, the respondents could still ask them to reverse the credit under GST Act provisions.

Since the petitioners couldn’t transition the credit anymore, the court deemed it necessary for the respondents to decide whether the petitioners were entitled to the credit. The court directed the respondents to issue notices to the petitioners within forty-five days from the date of the order. The petitioners could then reply, and if found entitled to the credit, the respondents would take appropriate action.