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TMI Blog2019 (5) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... is engaged in the business of leasing and financing of vehicles and equipments. They were earlier registered under the Telangana Value Added Tax Act and now registered under the Central and State GST Acts. 4. According to the petitioner, they had an input tax credit to the tune of Rs. 1,79,23,784/-, as on the date of bifurcation of the composite State of Andhra Pradesh, namely, 02.06.2014. In order to deal with the question of transfer of ITC, as between the bifurcated States that came into existence after reorganization, a circular dated 12.05.2015 was issued by the commissioner of Commercial Taxes. The circular prescribed that those dealers, who migrated from the State of Andhra Pradesh to the State of Telangana may claim Net Credit Carried Forward (NCCF) in the State to which they have migrated after the appointed date. It was further stipulated that the formula shall be in tune with Section 56 of the Andhra Pradesh State Reorganization Act, 2014. 5. According to the petitioner, they migrated to the State of Telangana after bifurcation and the amount of total ITC available to their credit was shown in the Web Portal of the Department as Rs. 1,77,65,101/-. 6. It is the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was wrong (4) that Rule 120 cannot override the Act, (5) that the three conditions laid down in the proviso to Section 140(1) of the Act are not satisfied in this case, (6) that the respondents cannot rely upon the CCT circular dated 12.05.2015, as it has no application to GST law, which came into effect only in 2017 and (7) that the impugned order does not deal with various contentions raised by the petitioner, in their reply. 12. In response to the above contentions, it is argued by Mr. J. Anil Kumar, learned Special Standing Counsel that the case on hand is a classic example of the difficulties posed by the transition from VAT regime to GST regime, even before the problems posed by the bifurcation of the State got resolved. According to the learned Special Standing Counsel, Section 140 of the Telangana GST Act does not deal with the question of apportionment between the bifurcated States and that a clear mechanism was provided in the VATIS system as to how a dealer could utilize the Net Credit Carried Forward (NCCF). According to the learned Special Standing Counsel, the petitioner ought to have claimed the benefit of 28 NCCF against the liabilities in the monthly retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional under section 10, shall be entitled to take, in his electronic credit ledger, credit of the amount of Value Added Tax [and Entry Tax] carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law, not later than ninety days after the said day, in such manner as may be prescribed: Provided that the registered person shall not be allowed to take credit in the following circumstances, namely:- (i) where the said amount of credit is not admissible as input tax credit under this Act; or (ii) where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date; Provided further that so much of the said credit as is attributable to any claim related to section 3, sub-section (3) of section 5, section 6, section 6A or sub-section (8) of section 8 of the Central Sales Tax Act, 1956 (74 of 1956) that is not substantiated in the manner, and within the period, prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 shall not be eligible to be credited to the electronic credit ledger: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted day: Provided that where a registered person, other than a manufacturer or a supplier of services, is not in possession of an invoice or any other documents evidencing payment of tax in respect of inputs, then, such registered person shall, subject to such conditions, limitations and safeguards as may be prescribed, including that the said taxable person shall pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to take credit at such rate and in such manner as may be prescribed. (4) A registered person, who was engaged in the sale of taxable goods as well as exempted goods [or tax free goods] under the existing law but which are liable to tax under this Act, shall be entitled to take, in his electronic credit ledger,- (a) the amount of credit of the value added tax [and entry tax]carried forward in a return furnished under the existing law by him in accordance with the provisions of subsection (1); and (b) the amount of credit of the value added tax [and entry tax] in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day, relating to such exempted goods [or tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The second and third provisos are not relevant for our purpose, as they relate to credit attributable to any claim related to certain provisions of Central Sales Tax Act, 1956. 19. But the first proviso, which may be relevant, stipulates that under two contingencies, a registered person shall not be allowed to take credit. These contingencies are (1) where the amount of credit is not admissible as Input Tax Credit under this Act and (2) where the registered person has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed day. It is not the case of the second respondent that the case of the petitioner would fall under any of the contingencies stipulated in the first proviso to sub-section (1) of Section 140. 20. Sections 16 to 21 of the Telangana GST Act, 2017 deal with Input Tax Credit. While Section 16 lays down the eligibility as well as the conditions for taking Input Tax Credit, Section 17 speaks about the apportionment of credit, when the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes. Section 18 takes care of ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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