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2019 (8) TMI 662 - HC - GSTTransition/migration of ITC - scaling down of ITC which is capable of migration / capable of transition into the GST Regime - Part of ITC given up and sought to be adjusted with VT / CST liability - deemed assessment u/s 22(2) of TNVAT Act - Assessment Year 2015-2016 - HELD THAT - Revenue submitted that in the facts and circumstances of the instant case, adjustment sought for by the writ petitioner is permissible but subject to quantification / verification as adumbrated in Rule 121 of 'Tamil Nadu Goods and Services Tax Rules, 2017 If that be the case, the aforesaid verification process has to be completed and the outcome of the verification process will obviously impact the impugned order being given effect to. To be noted, as already mentioned above, writ petitioner accepts tax liability under the impugned order and what is put in issue in the instant writ petition is only the adjustment plea - the respondent shall do the verification exercise under Rule 121 of TNGST Rules as expeditiously as possible and until this exercise is completed, the impugned order will be kept in abeyance. Post verification, outcome of the verification process together with its impact on the impugned order shall be communicated to the writ petitioner within ten (10) working days from date of completion of verification / quantification as above under due acknowledgement - Petition disposed off.
Issues:
Assessment under 'Assessment Year 2015-2016' and transition of 'Input Tax Credit' (ITC) from Tamil Nadu Value Added Tax Act to Tamil Nadu Goods and Services Tax Act. Reopening of assessment under CST Act and adjustment of ITC against tax liability. Analysis: The case involves an assessment made for the 'Assessment Year 2015-2016' and the transition of 'Input Tax Credit' (ITC) from the Tamil Nadu Value Added Tax Act to the Tamil Nadu Goods and Services Tax Act. The petitioner, a registered dealer under the TNVAT Act, sought to migrate ITC into the GST regime under Section 140 of the TNGST Act. Initially claiming ITC of over 2.14 crores, the petitioner later adjusted it to little over 38.51 lakhs due to lack of supporting forms. The dispute arose when the petitioner's request to adjust part of the ITC given up against a CST assessment was not accepted. Regarding the CST assessment made on 31.05.2017, the department reopened the assessment based on 'C' Forms for concessional tax rate and 'H' Forms for exemptions filed by the petitioner. The assessment was revised, scaling down the liability from over 33.71 lakhs to over 13.92 lakhs. The petitioner contested that the adjustment of the ITC given up was not considered in the revised assessment. The respondent argued that the ITC claimed for migration was provisional, citing Section 19(16) of the TNVAT Act. The petitioner contended that the adjustment of the ITC given up was not addressed in the assessment. The court directed the respondent to verify the adjustment as per Rule 121 of the TNGST Rules and communicate the outcome to the petitioner within ten working days. Until the verification process is completed, the impugned order will be kept in abeyance. The judgment emphasized the need for expeditious verification of the adjustment sought by the petitioner and highlighted that the outcome of the verification process would determine the tax liability under the impugned order. The court instructed the respondent to complete the verification process promptly and communicate the results to the petitioner within the specified timeframe. The case was disposed of with directions for the verification process, keeping the impugned order in abeyance until completion.
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