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2024 (3) TMI 268 - HC - GSTTransitional credit - Petition is a works contractor - TDS was transitioned under Section 140 of the TNGST Act, 2017, along with the “purchase tax” paid by the petitioner, which was availed as Input Tax Credit - Transition of Tax Deducted at Source (TDS) under Section 13 of the TNVAT Act, 2006, on Works Contract. Transition of ITC validly availed - HELD THAT:- On perusing the records, there is also no doubt that the petitioner was entitled to ITC on Section 12(2) of the TNVAT Act, 2006. To that extent, there is merits in the submission of the petitioner - If ITC was validly availed by the petitioner on “purchase tax” paid 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 - The petitioner is therefore justified in assailing the impugned Assessment Order although 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 petitioner therefore deserves a chance to defend the case as the impugned Assessment Order has been passed during the period when the country was under semi-lock down mode. If the VAT-TDS had indeed remained unutilized for discharging tax liability under TNVAT Act, 2006, there should be a fresh adjustment of the amount out of VAT-TDS towards tax liability of the petitioner and thereafter ITC which would have remained unutilized ought to have allowed to be transitioned under Section 140 of the Act or refunded to the petitioner under Section 54 of the TNGST Act, 2017 read with TNVAT Act, 2006. This issue would thereafter require a proper re-consideration. Therefore, these writ petitions are allowed by way of remand.
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