Transitional VAT TDS credit can be carried forward into GST when accrued earlier and reflected in returns.

Transitional VAT TDS credit accrued under the earlier tax regime and reflected in returns can be carried forward into GST under Section 140 of the Tamil Nadu GST Act, 2017. A request for such transition cannot be rejected by a non-speaking order, because the statutory scheme supports treatment of the deducted amount as eligible credit where it had already accrued before migration to GST. Applying that purposive construction, the rejection of the request to carry forward unadjusted VAT TDS was unsustainable, and the credit was held to be admissible for transition.

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Issues: Whether rejection of the request to carry forward unadjusted VAT TDS into the GST regime was sustainable under Section 140 of the Tamil Nadu Goods and Services Tax Act, 2017.

Analysis: The request was rejected without reasons. The cited prior decision had already held that amounts collected or deducted during the VAT regime and reflected in returns could be treated as credit for transition under Section 140. That view was supported by the statutory scheme governing assessment and collection under the TNVAT regime, and by the principle that transitional credit should receive a purposive construction when the credit had accrued under the earlier law before migration to GST.

Conclusion: The rejection was unsustainable and the petitioner was entitled to transition the VAT TDS credit under Section 140 of the Tamil Nadu Goods and Services Tax Act, 2017.

Ratio Decidendi: Transitional VAT TDS credit, when accrued under the earlier tax regime and reflected in the returns, is eligible to be carried forward into GST under Section 140, and a non-speaking rejection of such a claim cannot stand.

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