Petitioner | Arun Structurals |
Respondent | The State Tax Officer |
Decision by | Madras High Court |
Date of order or Judgement | 01-April-2022 |
Citation no. | WP (MD) No.8681 of 2021 2022 (4) GSTPanacea 63 HC Madras |
Hon’ble Judge | Justice C.Saravanan |
Decision | Matter Remanded |
Transitional ITC-If the credit has been validly transited for the old firm to the new firm than the credit for un-utilized ITC shall be allowed.
Transitional ITC-Facts of the Case
Transitional ITC-It is the case of the petitioner that the petitioner’s predecessor was a partnership firm and unfortunately, one of the partner died. Under these circumstances, the legal heirs of the deceased partner were added as partners into the partnership firm and a fresh registration was obtained on 10.04.2017. Further the old concern and its stock, input tax credit were taken over by the new partnership concern. The petitioner reported opening balance of input tax credit of Rs.17,60,473/-. However, the same was not reflected in the online monthly return and therefore, the petitioner had sent a representation dated 08.05.2017, requesting the respondent to permit them to take the closing credit to the new firm. The petitioner had attempted to transition the aforesaid credit of Rs.17,60,473/-, which is now sought to be denied.
Argument Before Court
Transitional ITC-Petitioner’s Contention
The petitioner claimed input tax credit in Annexure – 29 in the monthly returns filed for the months from April 2017 to June 2017. It is submitted that the petitioner has also filed returns under the provisions of the Goods and Services Tax Act, 2017, which came into force on 01.07.2017. The petitioner had attempted to transition the aforesaid credit of Rs.17,60,473/-, which is now sought to be denied. The petitioner further submits that the petitioner was issued with pre-assessment notice and that the petitioner had also replied to the same. However, the impugned order has been passed without following the principles of natural justice, inasmuch as the petitioner was not heard before the impugned order was passed.
Transitional ITC-Respondent’s Argument
The respondent submits that there is no merit in the Writ Petition, inasmuch as the above said amount was not reflected in the monthly return filed for the month of June 2017 and therefore, it was not open for the petitioner to transition the above said credit in new GST regime.
The respondent further submits that as per Rule 10(8)(a) of the Tamil Nadu Value Added Tax Rules, 2007, the transferee claiming input tax credit under sub-section (14) of Section 19 shall furnish the following details, namely:-
(i) Un-availed credit available in the account of the transferor as certified by a Chartered Accountant or Cost Accountant;
(ii) Inventory of stock transferred with date;
(iii) Details of capital goods transferred; and
(iv) Original tax invoices evidencing the payment of tax at the time of purchase.
However, the petitioner had not filed the above records for proving the transfer of input tax credit to the new TIN number.
Madras High Court Held
Transitional ITC-The question that has to be answered is whether the above said credit which was lying un-utilized in the hands of M/s. Arun Structurals, which had TIN No.33604100485 and whether the above said credit could have been transferred in the name of the petitioner also called ”M/s. Arun Structurals” While quashing the impugned order and emitting the case back to the respondent to pass a speaking order, I direct the respondent to examine the records of the petitioner and the provisions of the Tamil Nadu Value Added Tax Act and the Rules made thereunder and ascertain whether the credit was validly transitioned to the petitioner after it took over the business of the erstwhile firm namely, M/s. Arun Structurals. If it was validly transmitted, the same shall be allowed to be transitioned. The above exercise shall be carried out by the respondent within a period of three months from the date of receipt of a copy of this order. The petitioner is directed to furnish all the documents that may available to substantiate the same.
Download PDF
Arun Structurals
For Reference Visit
Madras High Court