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TMI Blog2022 (1) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... ply to the Show Cause Notice dated 09.05.2019 followed by a summary Show Cause Notice dated 31.12.2019, the question of levying interest and imposing penalty on the petitioner under the provisions of Tamil Nadu Goods and Services Tax Act, 2017 does not arise inasmuch as the entire transitional credit of Rs. 3,86,271/- was reversed by the petitioner in the monthly returns for the month of January 2020 for the Assessment Year 2019-2020. 3. The learned counsel for the petitioner submits that Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 will get attracted only where there is a wrong utilization of credit availed. In this connection, the learned counsel for the petitioner has referred to Section 50 (3) of the Act. It is submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eads as under:- "Section 42. Matching, reversal and reclaim of input tax credit- (7). The recipient shall be eligible to reduce, from his output tax liability, the amount added under sub-Section (5), if the supplier declares the details of the invoice or debit note in his valid return within the time specified in sub-Section (9) of Section 39." 6. The learned counsel for the petitioner has also referred to decision of the Hon'ble Division Bench of the Patna High Court in the case of Commercial Steel Engineering Corporation Vs. State of Bihar, [2019] 28 GSTL 579 (Patna). A specific reference was made to Paras 29 and 35 & 36 which reads as under:- "29. I have reproduced the relevant provisions of the 'BGST Act' which finds mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te misappreciation of legal position which lies at the foundation of the demand raised by the impugned order whereby the credit amount reflected in the credit ledger to the tune of Rs. 42,73,869.00 has been treated as an outstanding tax liability against the petitioner to order for its recovery together with interest and penalty even when the electronic credit ledger status at Annexure 7 confirms to a credit in favour of the petitioner i.e. a negative tax liability." 7. Opposing the prayer, the learned Additional Government Pleader for the respondent submits that the petitioner has an alternate remedy under Section 107 of the Tamil Nadu Goods and Services Act, 2017 and therefore this writ petition is liable to be dismissed. 8. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act, 2017 and therefore prays for the dismissal of the writ petition. 12. Heard the learned counsel for the petitioner and the learned Additional Government Pleader for the respondents and perused the impugned order and the decision of the Hon'ble Patna High Court referred to supra. 13. The undisputed facts of the case are that the petitioner is a hotelier and had purchased certain capital goods in connection with the business. Since GST was being implemented, the petitioner appears to have availed input tax credit paid on the capital goods which were purchased in connection with the hotel business with a view to set off the tax liability on the furniture business which the petitioner intended to start. 14. There are no record to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2017. However, the said notice merely states that due to the unavailability of documents to prove admissibility of the ITC, Assessment under Section 74 is proceeded. Thus, the Show Cause Notice dated 31.12.2019 does not meet the requirements of Section 74(9) of the TNGST Act, 2017. 18. The Hon'ble Supreme Court in Union of India Vs. Ind-Swift Laboratories Limited [2011] 4 SCC 635 while construing the provisions of erstwhile Cenvat Credit Rules 2002, held that wrong filing of credit rule attracts interest under the Provisions of the Cenvat Credit Rules 2002 read with Central Excise Act, 1944. There the credit was availed and the benefit of refund was claimed. The case was attempted to be settled after payment of the amount ITC availed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovider of the output service. The issue is as to whether the aforesaid word "Or" appearing in Rule 14, twice, could be read as "AND" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word "OR" in between the expressions 'taken' or 'utilized wrongly' or 'has been erroneously refunded' as the word "AND". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest" 19. The ratio in the above case is to be distinguished on facts as in the present case although credit was wrongly attempted to be transitioned, it was never utilized. Further before levying penalty or interest, a prop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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