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2023 (10) TMI 853 - HC - GSTValidity of GST registration certificate granted w.e.f 1.6.2018 instead of with retrospective effect i.e. 1.7.2017 - Whereas GST liability confirmed w.e.f. 1.7.2017 - Condition (no 4) of foregoing the benefit of Input Tax Credit (ITC) for the period prior to 1.6.2018 - HELD THAT - The petitioner is ready and willing to comply with the conditions in the impugned notice. However, the petitioner expressed his difficulty to comply with the 4th condition to forgo the Input Tax Credit. The reason stated in the impugned order is that the validity is being granted retrospectively, then the petitioner ought to forgo. It is seen that the petitioner is already as assessee under VAT. The petitioner is seeking to migrate from VAT to GST. Input Tax Credit is available in VAT regime also. In such circumstances the petitioner would have the details and evidence to substantiate his claim of Input Tax Credit and there cannot be difficulty to avail Input Tax credit for the said period. Therefore, the impugned order directing to forego Input Tax Credit is unreasonable and cannot be sustained and the same is liable to be quashed. The impugned order is hereby quashed as far as the 4th condition is concerned. The petitioner shall furnish the details as stated in other conditions and thereafter the respondents shall consider the application for migration. The Input Tax Credit shall be granted based on the details and evidence that would be submitted by the petitioner. Petition allowed.
Issues involved:
The judgment addresses the issue of migration from VAT to GST, specifically regarding the retrospective validity of registration and the conditions imposed on the petitioner for availing Input Tax Credit. Details of the Judgment: Issue 1: Migration from VAT to GST The petitioner, a business proprietor, sought to migrate from VAT to GST. While the migration process was completed in the State of Kerala, it faced hurdles in Tamil Nadu due to the non-acceptance of the application. The petitioner, after raising concerns, eventually received registration with retrospective validity from 01.06.2018, although the tax liability commenced from 01.07.2017. The petitioner requested the validity to be granted from 01.07.2017 to avail tax credit benefits. The respondents issued a notice with conditions for consideration, including details of supplies, input tax credit, output liability, and an undertaking to forgo input tax credit retrospectively. The petitioner agreed to comply with conditions 1 to 3 but faced difficulty with the 4th condition of forgoing input tax credit due to the retrospective validity granted. The court found this condition unreasonable and ordered its quashing, allowing the petitioner to submit necessary details for migration. Issue 2: Input Tax Credit The court emphasized that the petitioner, having been an assessee under VAT, should have no difficulty in substantiating the claim for input tax credit, as it was available in the VAT regime. The court deemed the direction to forgo input tax credit as unreasonable and unsustainable. Consequently, the impugned order dated 16.11.2022 was quashed concerning the 4th condition. The court directed the petitioner to provide details as per conditions 1 to 3, following which the respondents were instructed to consider the migration application and grant input tax credit based on the evidence submitted by the petitioner. Conclusion The court allowed the writ petition, with no costs imposed, and closed the connected miscellaneous petition. The judgment clarified the petitioner's entitlement to input tax credit during the migration process from VAT to GST, ensuring a fair consideration of the application based on the provided details and evidence.
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