TNVAT ITC utilised during GST Period without Filing TRAN 1 : Madras HC Sets Aside S.74 Order, Allows Fresh Hearing [Read Order]
The Court noted that in similar cases, a consistent view has been taken to offer assessees a chance to rectify such procedural lapses, subject to conditions
![TNVAT ITC utilised during GST Period without Filing TRAN 1 : Madras HC Sets Aside S.74 Order, Allows Fresh Hearing [Read Order]](https://images.taxscan.in/h-upload/2025/06/26/2054840-tnvat-itc-tran-1-taxscan.webp "TNVAT ITC utilised during GST Period without Filing TRAN 1 : Madras HC Sets Aside S.74 Order, Allows Fresh Hearing [Read Order]")
The Madurai Bench of the Madras High Court has set aside a demand order issued under Section 74 of the Goods and Services Tax ( GST ) Act, 2017 for availing Input Tax Credit ( ITC) without filing TRAN-1 as prescribed under Section 140 of GST Act. The impugned order pertained to the alleged wrongful availment of Input Tax Credit (ITC) under the erstwhile Tamil Nadu VAT (TNVAT)...
The Madurai Bench of the Madras High Court has set aside a demand order issued under Section 74 of the Goods and Services Tax ( GST ) Act, 2017 for availing Input Tax Credit ( ITC) without filing TRAN-1 as prescribed under Section 140 of GST Act.
The impugned order pertained to the alleged wrongful availment of Input Tax Credit (ITC) under the erstwhile Tamil Nadu VAT (TNVAT) Act, which the petitioner had utilised during the GST period without filing the mandatory TRAN-1 form.
The petitioner was a registered dealer under the TNVAT Act, 2006 and had unutilised ITC as of 13.06.2017. Post implementation of GST, the petitioner is said to have adjusted this ITC without filing the TRAN-1 form, which is the statutory requirement under Section 140 of the TNGST Act for carrying forward transitional credit.
The department alleged that this amounted to a wrongful claim of credit and proceeded to issue a show cause notice. However, no reply was submitted by the petitioner, following which the department passed a demand order under Section 74 of the Act.
The Court noted that in similar cases, a consistent view has been taken to offer assessees a chance to rectify such procedural lapses, subject to conditions.
Accordingly, Justice C. Saravanan quashed the impugned assessment order dated 29.10.2024 and remitted the matter back to the assessing authority for fresh adjudication, subject to the petitioner depositing 25% of the disputed tax amount in cash as a pre-condition.
The Court clarified that the impugned order shall be treated as a corrigendum to the show cause notice and directed the petitioner to file a detailed reply within 30 days from the receipt of the order. The department is thereafter required to pass a fresh order on merits, preferably within three months, after granting a personal hearing.
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