2018 (8) TMI 526 - HC - VAT and Sales Tax

Input tax credit - double claim of input tax credit - Section 19(18) of the Tamil Nadu Value Added Tax Act, 2006 - Held that - It is admitted fact that there is an excess input tax credit to the credit of the petitioner. Even assuming that the respondent wanted to reverse the input tax credit, he ought to have deducted the same from the available credit of the petitioner as on 30.06.2017. Since the Goods and Service Tax Act came into force with effect from 01.07.2017, the question of carrying forward does not arise. The petitioner is entitled to maintain an application for refund - The respondent misdirected himself in the manner in which the proceedings should have been conducted, resulting in, an erroneous order. Had the respondent afforded an opportunity of personal hearing, these writ petitions itself could have been avoided and proper assessment orders could have been passed. The matter requires to be remanded to the respondent for fresh consideration - appeal allowed by way of remand.

Summary

Issues:
Challenge to assessment orders for the years 2013-14 and 2014-15 based on incorrect input tax credit claims and double claims, lack of opportunity for personal hearing, and improper assessment procedures.

Analysis:
The petitioner challenged the orders passed by the respondent for the assessment years 2013-14 and 2014-15, alleging incorrect input tax credit claims and double claims. The respondent issued a notice on 13.11.2017, proposing to levy the disputed amounts and penalties. The petitioner submitted a detailed reply on 13.12.2017, but the respondent did not provide a personal hearing or request for books of accounts before raising substantial demands.

It was acknowledged that there was an excess input tax credit in favor of the petitioner. The petitioner argued that if the respondent intended to reverse the credit, it should have been deducted from the petitioner's available credit as of 30.06.2017. The petitioner cited Section 19(18) of the Tamil Nadu Value Added Tax Act, 2006, allowing for the carry-forward of excess input tax credit to the next year or for a refund.

The court noted that with the introduction of the Goods and Service Tax Act from 01.07.2017, the concept of carrying forward input tax credit was no longer applicable. The petitioner was entitled to seek a refund instead. The court criticized the respondent for the flawed handling of the proceedings, emphasizing the necessity of a personal hearing to avoid such writ petitions and ensure proper assessment orders.

Consequently, the court decided to remand the matter back to the respondent for fresh consideration. The writ petitions were allowed, the impugned orders were set aside, and the respondent was instructed to schedule a personal hearing, review the petitioner's objections, and conduct a new assessment in compliance with the law. Any remaining issues could be raised before the Appellate Authority. No costs were awarded, and connected miscellaneous petitions were closed as a result.