Madras HC Allows Carry Forward of Unadjusted VAT TDS to GST regime [Read Order]

Madras High Court (HC) single bench chaired by Justice Abdul Quddhosh allowed to carry forward the unadjusted Value Added Tax (VAT) Tax Deduction Source (TDS) to Goods and Services Tax (GST) regime.

The bench quashed the contested order and the petitioner is entitled to transition TDS under the TNVAT Act in terms of Section 140 of the TNGST Act, 2017

The issue with this writ petition is that the petitioner, M/s. P & C Projects Private Ltd requested to carry over the accumulated credit under the TNVAT Act  in relation to TDS under Section 140(1) of the Goods and Services Tax Act, 2017 However, the respondent Assistant Commissioner (ST)(FAC) rejected the request without giving proper reason. 

The Central Value Added Tax (CENVAT) Credit carried forward in the previous return may be claimed by a registered person in accordance with Section 140(1). There are a few requirements that must be met in order for the Credit to be carried over, one of which is that all returns due for the period of January 2017 to June 2017 must be filed.

Tables 4 and 5 of the Form TRAN-1 must reflect the statement that must be made in order to claim the transitional credit under Section 140(1). Table 5(a) corresponds with the claim of a transitional credit under Central Rules for eligible duties, whereas Tables 5(b) and (c) deal with the claim of a transitional credit under State VAT laws.

The court took notice of the case Magma Fincorp Ltd. V. State of Telangana in the extracted judgement of M/s. DMR Constructions Vs. Assistant Commissioner, where the Telangana High Court interpreted “Section 140 purposively stating that ‘Once it is admitted that credit was available to the petitioner on the date of switch over from VAT regime to GST regime and once it is admitted that the petitioner may be entitled to make a claim for this credit in other modes, we think that the second respondent ought to have given a purposive interpretation to Section 140 of the Act read with Sections 16 to 21 of the Telangana GST Act 2017. As he has failed to do the same, the matter requires reconsideration’. 

The HC by considering the judgment in M/s. DMR Constructions Vs. Assistant Commissioner,  quashed the contested order on ground that being a non-speaking order as no reasons have been given for rejecting the petitioner's request for carrying forward of the unadjusted VAT TDS to the GST regime.

To Read the full text of the Order CLICK HERE

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