GST transition compliance and input tax credit dispute led to quashing of assessment with fresh adjudication directions.

Unutilised input tax credit carried forward under the Tamil Nadu VAT regime was examined in the context of GST transition compliance under Section 140 of the Tamil Nadu GST Act, 2017. The Court noted that the petitioner had not followed the prescribed transition procedure and had also failed to reply to the show cause notice. Taking a consistent approach in similar matters, it set aside the assessment and directed fresh adjudication by the assessing authority after hearing the petitioner, subject to a 25% pre-deposit of the disputed tax and filing of a reply to the notice.

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Issues: Whether the assessment order could be quashed and the matter remitted for fresh consideration in the light of the petitioner's claim of unutilised input tax credit under the Tamil Nadu Value Added Tax regime and the transition requirement under the GST law.

Analysis: The petitioner had carried forward unutilised input tax credit under the Tamil Nadu Value Added Tax Act, 2006 and had not followed the transition procedure contemplated under Section 140 of the Tamil Nadu Goods and Services Tax Act, 2017. The Court also noted the absence of a reply to the show cause notice. Taking note of its consistent approach in similar matters, the Court exercised discretion to set aside the impugned assessment and require fresh adjudication. The relief was made conditional upon payment of 25% of the disputed tax as pre-deposit, filing of a reply to the notice, and a fresh decision by the assessing authority after hearing the petitioner.

Conclusion: The assessment order was quashed and the matter was remitted for fresh decision, subject to pre-deposit and compliance with the directions issued by the Court.

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