2015 (1) TMI 1375 - HC - VAT and Sales Tax

Input tax credit - grievance of the petitioner is that the excess I.T. amount has got to be adjusted against outstanding tax due amount - Held that - since the respondent has not adjusted the excess tax amount, while setting aside the impugned order dated 14.11.2014, the respondent is directed to make assessment afresh in accordance with provisions of the Act by permitting the petitioner to avail the ITC on the excess of tax amount, within a period of four weeks from the date of receipt of a copy of this order - petition allowed - decided in favor of appellant.

Summary

Issues:
Petitioner seeking adjustment of excess I.T. amount against outstanding tax due amount. Interpretation of Section 19(17) of the Tamil Nadu Value Added Tax Act, 2006. Allegation of respondent overlooking the provision in revision proceedings.

Analysis:

The petitioner filed a writ petition seeking relief as the excess Input Tax amount was not adjusted against the outstanding tax due amount. The petitioner challenged the impugned order dated 14.11.2014 and requested the court to direct the respondent to re-do the assessment in accordance with the provisions of the Tamil Nadu Value Added Tax Act, 2006. The main contention was that the respondent did not adjust the excess ITC amount as required by Section 19(17) of the Act.

Section 19(17) of the Act states that if the Input Tax Credit determined by the assessing authority exceeds the tax liability for a year, the excess amount may be adjusted against any outstanding tax due from the dealer. The court noted that the respondent, in the revision proceedings, failed to consider this provision while reversing the ITC. The court found that the respondent overlooked this crucial aspect, leading to the petitioner's grievance.

Considering the provisions of Section 19(17) and the failure of the respondent to adjust the excess tax amount, the court directed the respondent to conduct a fresh assessment in accordance with the Act. The court specifically instructed the respondent to allow the petitioner to avail the Input Tax Credit on the excess tax amount within four weeks from the date of receipt of the court's order. Consequently, the court allowed the writ petition, with no costs imposed, and closed the connected miscellaneous petition.

In conclusion, the judgment highlighted the importance of adhering to statutory provisions, especially regarding the adjustment of excess tax amounts against outstanding tax dues. The court's decision emphasized the need for proper assessment procedures in line with the relevant tax laws to ensure fair treatment of taxpayers.