2023 (2) TMI 393 - HC - GST

Rejection of petitioner's request under Section 140(1) of the GST Act, 2017 for carrying forward of unutilized VAT TDS to the new GST regime without giving any reason - Non-speaking order - HELD THAT - This Court is of the considered view that being a non-speaking order as no reasons have been given for rejecting the petitioner's request for carrying forward of the unadjusted VAT TDS to the GST regime that too when the law has been well settled, which has attained finality as no Appeal has been filed against the said order as fairly admitted by the learned Government Advocate appearing for the respondents, the impugned order will have to be necessarily quashed and the Writ Petition will have to be allowed. Petition allowed.

Summary

Issues:
- Rejection of petitioner's request under Section 140(1) of the GST Act, 2017 for carrying forward accumulated credit under the TNVAT Act in respect of TDS.

Analysis:
1. The main issue in this case was whether the respondent was correct in rejecting the petitioner's request to carry forward the unutilized VAT TDS to the new GST regime under Section 140(1) of the GST Act, 2017.

2. The respondent had rejected the petitioner's request without providing any reason, leading to a challenge through a Writ Petition.

3. Reference was made to a previous judgment by a learned Single Judge in a similar case, where the issue of carrying forward accumulated credit in respect of TDS during the TNVAT regime was also involved. The findings of the previous judgment were considered relevant to the current case.

4. The learned Single Judge referred to various decisions by the Supreme Court and the High Court, emphasizing the distinction between the Income Tax Act and Sales Tax Act regarding the concept of carry forward of credit. The judgment highlighted that the Sales Tax Act allows for the carry forward of credit from year to year, automatically reflected in the assessee's account and set off against output tax liability.

5. After careful consideration of the previous judgment, the Court agreed with the view and findings given therein, leading to the conclusion that the impugned order rejecting the petitioner's request lacked reasoning and needed to be quashed.

6. The Court held that since the law had been well settled by the previous judgment, which had not been appealed against, the petitioner was entitled to transition TDS under the TNVAT Act in accordance with Section 140 of the TNGST Act, 2017. Consequently, the impugned order was quashed, and the Writ Petition was allowed without any costs.