Transfer of Business under TNVAT Act'2006

[venkatachalapathy parameshwaran]

Dear Expert,

One of the Partnership firm is converted to Private Limited Company. So the Partnership firm's Closing Input Tax Credit is Converted to Opening Credit in Private Limited Company.Now the Assessing authority is not accepted and rejected. So the client has go to Writ Appeal. But they received remanded and issued the fresh order by the assessing authority directed by High Court.

As per the Section 19(14) of TNVAT Act 2006: Where the business of a registered dealer is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the business to a joint venture with the specific provision for transfer of liabilities of such business, then, the registered dealer shall be entitled to transfer the input tax credit lying unutilized in his accounts to such sold, merged, amalgamated, leased or transferred concern. The transfer of input tax credit shall be allowed only if the stock of inputs, as such, or in process, or the capital goods is also transferred to the new ownership on which credit has been availed of are duly accounted for, subject to the satisfaction of the assessing authority.

Now my situation is : The Assessing Officer need to proof of Input Tax Credit transfer from Firm to Private Limited Company. So please guide for this Situation (if any favoured High Court Order please kindly mention with reply)

To the above said Section is not clearly mentioned any proof for Transfer of Input Tax Credit.

AI Summary

High Court Orders Reassessment of Input Tax Credit Transfer for Converted Firm Under Section 19(14) TNVAT Act 2006 A partnership firm converted into a private limited company sought to transfer its closing input tax credit to the new entity. However, the assessing authority rejected this transfer, prompting the client to file a writ appeal. The High Court remanded the case, instructing the assessing authority to issue a new order. According to Section 19(14) of the TNVAT Act 2006, input tax credit transfer is permissible if the business, including stock and capital goods, is transferred and accounted for. The assessing officer requires proof of this transfer. A respondent suggested the transfer qualifies as a going concern under the TNVAT Act.