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TMI Blog2024 (3) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... hough the limitation to file an appeal had expired long back. Transition of Tax Deducted at Source (TDS) under Section 13 of the TNVAT Act, 2006, on Works Contract - HELD THAT:- There is no scope for transmitting the credit under Section 140 of the TNGST Act, 2017. Section 140 of the TNGST Act, 2017 is applicable only to ITC - the provisions of the TNVAT Act, 2006 mandates adjustment of the amount so deducted at source and paid by the employer who engages the services of the works contractor. If indeed there was deduction of tax at source by the person who engaged the services of the petitioner, such amount was to be adjusted towards the tax liability of the petitioner. Thus, surplus ITC after adjustment of the tax liability is to be refunded to the petitioner after assessment under Rule 10(A) and 10(B) of TNVAT Rules, 2007. Excess of ITC remaining unutilized after such adjustment was to be refunded back to the petitioner if where there were no arrears of tax under the Act from the petitioner. If this was followed, there would have been surplus of ITC which was to be either refunded back to the petitioner or allowed to be transitioned under Section 140 of the TNGST Act, 2017. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the petitioner received the second mentioned final demand notice/final order dated 21.06.2023, calling upon the petitioner to pay the amount confirmed vide the impugned Assessment Order dated 27.04.2021 towards arrears of tax. 7. The learned counsel for the petitioner submits that the law on the subject is clear. He further submits that the petitioner was entitled to transition the credit of ITC lying unutilized in the VAT Account on 30.06.2017 and the impugned Assessment Order dated 27.04.2021 which has been passed without following the principles of natural justice is therefore liable to be quashed. 8. That apart, the learned counsel for the petitioner further submits that the petitioner has not received the third mentioned notice dated 22.01.2021 in DRC-02 which is said to have been issued under Section 73 of the TNGST Act, 2017. 9. The learned counsel for the petitioner has placed reliance on the decision of the Hon'ble Division Bench of this Court in M/s.Mahindra and Mahindra Limited Vs. The Joint Commissioner (CT) Appeals, Chennai - 6 and others, [2021] 89 GSTR 269 (Mad.), wherein, the Hon'ble Division Bench of this Court in Paragraph 6 has held as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of the learned Judge dismissing the writ petitions as barred by limitation, based on the decision of the Apex Court in Glaxo Smith Kline Consumer Health Care Pvt lTd. 149. It is brought to the knowledge of this court, a subsequent judgment of a Co-ordinate Bench of this court in W.A No.493/2021, wherein after considering the observations of the Hon'ble Apex Court, it was held that "no bar has been imposed by the Apex Court in entertaining a writ petition under Article 226 of the Constitution of India? and the same is quoted below for ready reference: 5. In our respectful view, the decision of the Hon'ble Supreme Court in the said decision has not held that a writ petition under Article 226 of the Constitution of India is an absolute bar. We are of the said view after noting the observations/findings rendered by the Hon'ble Supreme Court in the following paragraphs : 11. In the backdrop of these facts, the central question is: whether the High Court ought to have entertained the writ petition filed by the respondent? As regards the power of the High Court to issue directions, orders or writs in exercise of its jurisdiction under Article 226 of the Constitution of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all. 6. On a reading of the above extracted paragraphs, it is seen that the Hon'ble Supreme Court, after referring to the decision of the Constitution Bench in the case of Thansingh Nathmal, held that although the power of the High Court under Article 226 of the Constitution is very wide, the Court must exercise self imposed restraint and not entertain the writ petition. Further, in paragraph 15, the Hon'ble Supreme Court observed that the High Court may accede to such a challenge and can also non suit the petitioner on the ground that alternative efficacious remedy is available and that be invoked by the writ petitioner. In addition, in paragraph 19, the Hon'ble Supreme Court took note of the fact that when the High Court refuses to exercise the jurisdiction under Article 226 of The Constitution of India, it would be necessary for the Court to record that there was no case of violation of the principles of natural justice or non-compliance of statutory requirements in any manner. 7. Therefore, there are certain broad parameters, within which, the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in MANU/SC/0826/2010. The effect of ?laches? depends upon the facts of each case and is left to the discretion of the court to either reject or entertain a writ petition. In taxing matters, whenever a levy or demand is made without authority of law, the court would be within its power to set aside the same, because any illegality cannot be perpetuated on technicalities. Further, as per the provisions of the TNVAT Act, Section 84 empowers rectification of orders within five years from the date of any order passed by the assessing officer. It is settled law that the error contemplated therein is not just factual, but also legal error. When the power to the statutory authority is granted upto five years to modify the order, it cannot be said that the constitutional authorities would not have power to review the action. Therefore, concurring with the Division Bench, we do not concur with the decision of the Learned Judge to dismiss the writ petitions on the technicality of limitation, that too, when the batch was pending. We set aside the said order of the learned Judge and dispose of the writ appeals in WA.Nos.1446 and 1447/2021 accordingly. 13. It is submitted that although the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 998) 8 SCC 610, has been distinguished. 17. It is further submitted that in Paragraph 18 of the aforesaid case, the Hon'ble Supreme Court has clarified the position that the writ petition cannot be entertained assailing the Assessment Order beyond the statutory period of limitation prescribed for filing an appeal. 18. The learned Additional Government Pleader for the respondent submits that the writ petition challenging the impugned order on the ground of principles of natural justice or any other grounds viz., lack of jurisdiction etc., is available to the petitioner only if the writ petition was filed within the period of limitation. 19. I have heard the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent. 20. The decision of the Hon'ble Supreme Court in Glaxo Smith Kline Consumer Health Care Limited, referred to supra, which was cited by the learned Additional Government Pleader for the respondent indicates that even under Article 142 of the Constitution of India, the Court cannot extend the period of limitation. 21. The Hon'ble Supreme Court in M/s.Glaxo Smith Kline Consumer Health Care Limited referred to supra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by the petitioner under Section 12(1) of the TNVAT Act, 2006 and same was remaining un-utilized, the petitioner was entitled to transition the same under Section 140 of the TNGST Act, 2017 as transitional credit. 27. The petitioner is therefore justified in assailing the impugned Assessment Order although the limitation to file an appeal had expired long back. 28. In so far as transition of Tax Deducted at Source (TDS) under Section 13 of the TNVAT Act, 2006, on Works Contract rendered is concerned, there is no scope for transmitting the credit under Section 140 of the TNGST Act, 2017. Section 140 of the TNGST Act, 2017 is applicable only to ITC. 29. As per Section 13(3) of the TNVAT Act, 2006 read with Rule 9 of TNVAT Rules, 2007, the person employing a Works Contractor has to deduct and deposit the tax within fifteen (15) days and issue a Certificates Work to the contractor in the prescribed form for each deductions separately and send a copy of the Certificate of Deduction in Form S to the Assessing Authority having jurisdiction over the petitioner together with such documents as may be prescribed under the provisions of TNVAT Rules 2007. 30. As per Sub-Section 4 to Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 956 including a Central or State Government undertaking; v. a society including a co-operative society; vi. an educational institution; or vii. a trust; b the term "civil works contract'' shall have the same meaning as in the Explanation to Section 6 (2) Any person making such deduction shall deposit the sum so deducted to such authority, in such manner and within such time, as may be prescribed. (3) Any person who makes the deduction and deposit, shall within fifteen days of such deposit, issue to the said dealer a certificate in the prescribed form for each deduction separately, and send a copy of the certificate of deduction to the assessing authority, having jurisdiction over the said dealer together with such documents, as may be prescribed. (4) On furnishing a certificate of deduction referred to in sub-section (3), the amount deposited under sub-section (2), shall be adjusted by the assessing authority towards tax liability of the dealer under section 5 or section 6 as the case may be, and shall constitute a good and sufficient discharge of the liability of the person making deduction to the extent of the amount deposited: Provided that the burden of proving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may adjust the excess input tax credit against any arrears of tax or any other amount due from him. If there are no arrears under the Act or after the adjustment there is still an excess of input tax credit, the assessing authority shall serve a notice in Form P upon such dealer. Form P is issued to refund of ITC. 33. Though there are no prescribed method in the manner in which the amounts have to be adjusted and appropriated, what is evident is that the Tax Deducted at Source (TDS) under Section 13 of the TNVAT Act, 2006 read with Rule 9 of the TNVAT Rules, 2007 has to be adjusted towards the tax liability of the petitioner and thereafter the ITC and balance if any is to be allowed to be paid in cash. 34. Thus, it is evident that tax liability of the petitioner was to be discharged from and out of the Tax Deducted at Source (TDS) by the employer under Section 13 of the TNVAT Act, 2006 read with relevant TNVAT Rules, 2007 who engaged the petitioner as a Works Contractor and thereafter from the ITC and tax paid in cash by the petitioner. 35. Excess of ITC remaining unutilized after such adjustment was to be refunded back to the petitioner if where there were no arrears of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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