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2023 (1) TMI 1023 - HC - GSTMigration of TDS Credit from VAT to GST - Transitional provisions - whether the deduction is a credit of the amount of value added tax which a registered person is entitled to migrate in its electronic credit ledger? - HELD THAT:- The transitional provisions are made to make special provisions for the application of legislation to the circumstances which exist at the time when the legislation comes into force. In the case of UOI. VERSUS FILIP TIAGO DE GAMA OF VEDEM VASCO DE GAMA [1989 (11) TMI 307 - SUPREME COURT], it has been held that transitional provisions are to be purposefully construed and the paramount object in statutory interpretation is to discover what the legislature intended and this intention is primarily to be ascertained from the text of the enactment in question. It is in the aforesaid background that the provisions of Section 140(1) of the JGST Act are required to be construed. The said provision unambiguously provides for migration of credit i.e. tax paid under the erstwhile tax regime and the words used in Section 140(1) of the JGST Act, namely, ‘credit of amount of value added tax and entry tax’ is to be understood in the context in which it has been used - Admittedly, under the JVAT Act even entry tax was levied vide Section 11 and the said levy of entry tax was available as input tax credit for adjustment against output tax liability. TDS amount was also available for adjustment against output tax liability apart from the input tax credit which was available for adjustment against output tax liability. Proviso to Section 140(1) of the JGST Act provides that a registered person shall not be allowed to tax credit where the said amount of credit is not admissible as input take credit under the GST Act. It was contended by the Respondents that since TDS was in the nature of output tax, it was not admissible as input tax credit under the GST Act and, hence, cannot be allowed to be migrated. The Petitioners at the time of filing of their returns were left with no option but to forward the unadjusted TDS amount as excess input tax credit in the succeeding months and were not required or compelled to claim refund of unadjusted TDS amount. Thus, at this stage, the Respondents cannot contend that unadjusted TDS amount cannot be allowed to be migrated in terms of Section 140(1) of the JGST Act. Even otherwise, the stand of the Respondents is self-destructive, as if the Petitioners are not allowed to migrate the unadjusted TDS amount under the GST Regime, they would have become entitled for refund of the same with effect from 1st July, 2017 and would have certainly been entitled to statutory interest @ 9% on the said amount in terms of Section 52/53 of the JVAT Act. The action of the Respondent-authorities in passing the impugned orders denying migration of TDS amount and, consequently, levying interest and penalty thereupon is not sustainable in the eye of law and are liable to be quashed - It is declared that the Petitioners are entitled for migration of the TDS amount in terms of Section 140(1) of the JGST Act - Petition allowed.
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