ITC Reversal

[Yogesh Narashiman]

I have received a two notices from commercial tax department, that they have proposed to revise ITC for the period 2006-07 & 2007-08 for delay filling of returns after the stipulated time. (the returns was filled on 05.06.2008). The reason for ITC reversal as said in the notice as follows:

You are registered dealer and reported taxable sales turnover of Rs.578377 for the year 2006-07 and   Rs.28,82,230 for the year 2007-08 in monthly form-I returns filed on 05.06.2008, which was accepted and assessed U/s. 22(2) on 31.10.2012. On further perusal of assessment records, it is seen that the form I returns were filled beyond the prescribed due date.

Thus, you have filled the monthly returns after a delay of dated on 05.06.2008 1 1/4 year and availed ITC. according to the provisions of sec. 19(11) of the TNVAT act ITC for the month could be availed within 90 days from the date of purchase or before the end of the financial year whichever is later. the delay caused by you is abnormal and you are not eligible for ITC for the above said months (12 months 01.04.2007-31.03.2008). its therefore proposed to reverse the ITC u/s. 27(2) Rs. 118325.00 for 2007-08 & Rs. 21337/- for 2006-07

Besides penalty U/s. 27(4) of the TNVAT act 2006 will be considered.

Objections if any may be filled within 10 days from the date of receipt of this notice.

Note:

1. the annual turnover for the year 06-07 is Rs. 578377/-

2. i have not received any notice for non-filling for returns during the FY 2007-08 or 2006-07.

3. After voluntary disclosure of returns on 05.06.2008, they never issued any assessment orders til date. 

 

Kindly suggest me how to tackle this thing and do the needful at the earliest.

 

Yogesh

 

AI Summary

Input Tax Credit limitation: late returns can trigger reversal and penalties under TNVAT provisions for delayed filings.
Proposed reversal of Input Tax Credit arises from late filing of monthly returns beyond the statutory cut-off; the tax department asserts credit must be availed within 90 days or by the end of the financial year, and therefore ITC claimed after that period is ineligible and subject to reversal with possible penalty and interest. Respondent submissions stress a bona fide technical delay, claim that credits were applied to the purchase months, and seek condonation of delay.