MADRAS HIGH COURT DIRECTED AO TO ALLOW TRABSITIONAL CREDIT OF PURCHASE TAX PAID UNDER GST ACT IF ALREADY PAID UNDER VAT ACT

The Madras High Court in the case M/s. Sri Sasthaa Constructions Versus the Assistant Commissioner(ST) observed and has directed the Assessing Officer to allow transitional credit of purchase tax paid under Section 140 of the TNGST Act, 2017, if the petitioner had paid 'purchase tax' as stated under Section 12(1) of the TNVAT Act.

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The bench headed by Justice C. Saravanan in the case observed that the petitioner deserves a chance to defend the case as the impugned assessment order which was being passed during the period when the country was in semi-lockdown mode.

The court stated that if the VAT-TDS had indeed remained unutilized for discharging tax liability as stated under the TNVAT Act, 2006, there should be a fresh adjustment of the amount out of the VAT-TDS towards the tax liability of the petitioner, and thereafter, ITC, which would have remained unutilized, ought to have been allowed to be transitioned as stated under Section 140 of the Act or refunded to the petitioner under Section 54 of the TNGST Act, 2017 read with the TNVAT Act, 2006.