Transitional input tax credit adjustment deferred until verification and quantification under GST transition rules.

Transitional input tax credit under Section 140 of the Tamil Nadu GST Act could be adjusted against the revised assessment liability only after verification and quantification under Rule 121 of the Tamil Nadu GST Rules. The tax liability itself had already been accepted, but the adjustment claim remained subject to the prescribed verification exercise. The High Court therefore directed the respondent to complete verification expeditiously and kept the impugned order in abeyance until that exercise was completed, without finally allowing the adjustment claim on merits.

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Issues: Whether the petitioner was entitled to adjustment of the transitional input tax credit against the tax liability arising from the revised assessment, pending verification and quantification under the GST transition rules.

Analysis: The dispute concerned only the request to adjust part of the transitional input tax credit against the quantified liability, the tax quantification itself having been accepted. The claim for transition under Section 140 of the Tamil Nadu Goods and Services Tax Act, 2017 was stated to be subject to verification and quantification, and the Revenue accepted that adjustment was permissible in principle but only after the verification contemplated by Rule 121 of the Tamil Nadu Goods and Services Tax Rules, 2017. In view of that position, the Court directed the respondent to complete the verification exercise expeditiously and kept the impugned order in abeyance until the exercise was completed.

Conclusion: The petitioner's adjustment claim was not finally allowed on merits, but the respondent was directed to verify and quantify the claim and keep the impugned order in abeyance until completion of that exercise.

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