M/s SRI SASTHAA CONSTRUCTIONS vs. M/s SRI SASTHAA CONSTRUCTIONS, COIMBATORE
2024 Taxo.online 399
The petitioner stands at the crossroads of challenging an assessment order issued under the Tamil Nadu Value Added Tax (TNVAT) Act, 2006. At the heart of the petitioner's contention lies the alleged mishandling of Value Added Tax (VAT) deducted at source (TDS) and the subsequent utilization of surplus Input Tax Credit (ITC). The petitioner argues that a proper adjustment of VAT-TDS against their tax liability would have led to a surplus of ITC eligible for refund.
Upon thorough examination, it becomes apparent that the petitioner's grievances stem from the incorrect transition of VAT-TDS under the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, rather than seeking a refund under the TNVAT Act, 2006. The petitioner emphasizes the statutory provisions governing VAT-TDS adjustment and ITC refunds, urging adherence to these provisions by the assessing authority.
The court delves into the statutory framework provided under the TNVAT Act, 2006, and relevant rules governing VAT-TDS adjustment. It underscores the mandate for VAT-TDS to be primarily utilized to discharge the tax liability of the petitioner, followed by the refund of surplus ITC, if any.
Further scrutiny reveals the inadvertent transition of VAT-TDS under the TNGST Act, 2017, complicating the process of ITC refund. The court observes that such a transition was erroneous, as there exists no provision for the transition of VAT-TDS remaining unutilized under the TNGST Act, 2017.
Considering the procedural irregularities and the petitioner's entitlement to a fair hearing, the court deems it appropriate to remand the case for re-assessment. It directs the assessing officer to rectify the erroneous adjustment of VAT-TDS and facilitate the refund of surplus ITC under the provisions of the TNVAT Act, 2006.
In light of the foregoing analysis, the court quashes the impugned assessment orders and remands the cases back to the respondent with specific directives:
- The assessing officer is instructed to adjust VAT-TDS against the petitioner's tax liability as per the provisions of the TNVAT Act, 2006, and subsequent rules.
- Following the adjustment of VAT-TDS, the surplus ITC eligible for refund must be promptly disbursed to the petitioner.
- Transitional credit of Purchase Tax paid under the TNGST Act, 2017, is to be allowed if the petitioner meets the requisite criteria.
With these directives in place, the court ensures that the petitioner's grievances are comprehensively addressed, fostering fairness and adherence to statutory provisions in tax assessment proceedings.
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