2023 (8) TMI 340 - HC - GST

Recovery of amount wrongly transitted as input tax credit lying un-utilised under the VAT return - interest under Section 50(3) of the TNGST Act, 2017 read with Rule 121 of the TNGST Rules - HELD THAT - The Hon ble Supreme Court has meanwhile taken note of the difficulties faced by the assessee and the mistakes committed by them, while transitting the input tax credit lying un-utilised on the cut off date on 30.06.2017. The Hon ble Supreme Court in its decision in the case of Union of India Vs. Filco Tade Centre Pvt Ltd , SLP(C).No.32709-32710 of 2018, order dated 22.07.2022 2022 (7) TMI 1232 - SC ORDER and 02.09.2022 2022 (9) TMI 514 - SC ORDER , has directed the respondents to allow the transitional credit. Pursuant to the aforesaid order of the Hon ble supreme Court, the respondent has also regularised the credit worngly transitioned as a un-utilised VAT lying in the petitioner s account. However, the respondent has not set aside the interest that was imposed on the petitioner under Section 18(3) of the TNGST Act, 2017 vide the impugned order. The impugned order stands recalled - Petition allowed.

Summary

Issues involved:
The issues in this case involve the incorrect transitting of input tax credit, issuance of notice for payment, imposition of interest under TNGST Act, 2017, and subsequent regularization of credit based on Supreme Court directions.

Transitting Input Tax Credit:
The petitioner, a Central Excise Assessee, mistakenly stated the amount under the wrong column while filing Form TRANS-1, resulting in the issuance of a notice by the respondent. The impugned order required the petitioner to pay the amount wrongly transitted as input tax credit under the VAT return, along with interest under Section 50(3) of the TNGST Act, 2017.

Supreme Court Directions:
The Hon'ble Supreme Court, in the case of Union of India Vs. Filco Trade Centre Pvt Ltd, directed the respondents to allow transitional credit for difficulties faced by the assessee in transitting input tax credit un-utilised by the cut-off date. Consequently, the respondent regularized the credit wrongly transitted as un-utilised VAT in the petitioner's account, as per the Supreme Court's order.

Regularization of Credit:
Following the Supreme Court's directive, the respondent passed an order allowing CGST transitional credit in favor of the dealer after due verification of records and recommendations from the CENTER. However, the interest imposed on the petitioner under Section 18(3) of the TNGST Act, 2017, was not set aside in the initial order.

Court Decision:
After considering arguments from both parties, the Court recalled the impugned order and directed the respondent not to charge any interest on the petitioner, as the transitted VAT credit lying unutilized had been regularized in the subsequent order. The writ petition was allowed, with no costs, and connected writ miscellaneous petitions were closed as a result of the Court's decision.