2022 (6) TMI 357 - HC - GST

Petitioner agrees to pay correct 12% GST rate instead of 5% erroneously paid, can claim Input Tax Credit under Section 16

Travancore Mats and Mattings Pvt. Ltd. Versus The Assistant Commissioner, Office of the Assistant Commissioner (ST), The Senior Intelligence Officer, The State Tax Officer

The Madras HC disposed of a writ petition challenging a GST notice after the petitioner agreed to pay the correct 12% tax rate instead of the 5% ... Rate of tax - petition was into wrong apprehension that he need not pay 12% of the tax and it is only 5%, accordingly he started to pay 5% of tax from November 2017 till April 2019 - partnership firm which was subsequently converted into a Private Limited Company - eligibility to claim Input Tax Credit - HELD THAT:- Even though the prayer sought for in these writ petitions is against the order dated 07.10.2021 issued under Section 61 of the GST Act, now in view of the stand taken by the petitioner as projected by the learned counsel appearing for the petitioner that, the petitioner is ready and willing to pay the tax at the rate of 12% by making the payment of the remaining 7% for the period from November 2017 to April 2019, we need not traverse into the merits of the case with regard to the veracity of the impugned notice dated 07.10.2021 as literally the said challenge is given up. This Court feels that, if the petitioner is ready and willing to make the payment of the remaining 7% totally 12% tax for the period from November 2017 to April 2019 covering the assessment year 2017- 18, 2018-19 and 2019-20, it is open to the petitioner to make the said demand at the earliest. Input Tax Credit - HELD THAT:- It is open to the petitioner to make a claim for ITC at the jurisdictional GST Office in the State of Kerala, where the Headquarter of the petitioner company is located and if such an availment is made by the petitioner by filing the return at the Kerala Tax Authorities jurisdiction, the same shall be considered and decided as per the eligibility of the petitioner within the meaning of the provisions of the GST Act, especially Section 16 and in this regard, the change of the GST registration number between old and new, in view of the change of composition of the petitioner's Firm into Private Limited Company, shall not stand in the way. Petition disposed off. Issues:1. Discrepancy in tax payments under the GST regime.2. Notice issued under Section 61 of the GST Act for scrutiny.3. Change in GST registration number due to conversion from a partnership firm to a Private Limited Company.4. Eligibility to claim Input Tax Credit (ITC) and jurisdictional authority for ITC claim.Analysis:Discrepancy in Tax Payments:The petitioner, a dealer under the GST regime, initially paid 12% tax for goods from July 2017 to October 2017. Subsequently, realizing that only 5% tax was applicable based on the goods, the petitioner paid 5% tax from November 2017 to April 2019. Despite filing returns for the relevant assessment years, a notice under Section 61 of the GST Act was issued for scrutiny, leading to discrepancies in tax payments.Notice under Section 61 of the GST Act:The Assessing Authority found discrepancies in the petitioner's tax payments, noting the obligation to pay 12% tax instead of 5% for the period from November 2017 to April 2019. An intimation was issued to initiate proceedings against the petitioner under the GST Act, which was challenged through writ petitions.Change in GST Registration Number:The petitioner's composition changed from a partnership firm to a Private Limited Company, resulting in a change in GST registration numbers for the Branch Office in Tamil Nadu and Head Office in Kerala. The petitioner argued that this change should not affect the eligibility to claim ITC and requested permission to claim ITC from the jurisdictional State GST Authorities in Kerala.Eligibility to Claim Input Tax Credit (ITC):The petitioner expressed willingness to pay the remaining 7% tax to total 12% for the period in question. The court allowed the petitioner to make the payment within two weeks and subsequently claim ITC at the jurisdictional State GST Office in Kerala. The change in GST registration numbers due to the conversion of the petitioner's firm was deemed irrelevant in claiming ITC if eligible under the GST Act.This judgment emphasizes the importance of accurate tax payments under the GST regime, scrutiny under Section 61 of the GST Act, and the eligibility and process of claiming Input Tax Credit, considering changes in business composition and GST registration numbers.