TaxTMI 
TaxTMI 
2022 (1) TMI 1213
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.... Assessment Year 2019-2020. 3. The learned counsel for the petitioner submits that Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 will get attracted only where there is a wrong utilization of credit availed. In this connection, the learned counsel for the petitioner has referred to Section 50 (3) of the Act. It is submitted that interest under Section 50 (3) of the Act will apply only in the case of a person who makes undue or excess claim of Input Tax Credit under sub-section 10 of Section 42 or undue or excess reduction in output tax liability under sub-section 10 of Section 43 in which case, interest shall be paid on such undue or excess claim or on such undue or excess reduction/deduction as the case may be, at such rate not exceeding 24 percentage as may be notified by the Government on the recommendations of the GST Council. 4. The learned counsel for the petitioner further submits that Section 42 (10) of the Tamil Nadu Goods and Services Tax Act, 2017 is not attracted in the facts and circumstances of the case, as the petitioner has never utilized the credit which was attempted for transition by filing TRAN-1. He submits that sub-section 10 to Section 42....
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.... 33. ...... 34. ...... 35. The legislative intent reflected from a purposeful reading of the provisions underlying section 140 alongside the provisions of section 73 and Rules 117 and 121 is that even a wrongly reflected transitional credit in an electronic ledger on its own is not sufficient to draw penal proceedings until the same or any portion thereof, is put to use so as to become recoverable. 36. This important aspect of the matter has eluded the wisdom of the respondent no.3 while passing the order. In fact it is on a complete misappreciation of legal position which lies at the foundation of the demand raised by the impugned order whereby the credit amount reflected in the credit ledger to the tune of Rs. 42,73,869.00 has been treated as an outstanding tax liability against the petitioner to order for its recovery together with interest and penalty even when the electronic credit ledger status at Annexure 7 confirms to a credit in favour of the petitioner i.e. a negative tax liability." 7. Opposing the prayer, the learned Additional Government Pleader for the respondent submits that the petitioner has an alternate remedy under Section 10....
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.... petitioner had started suchbusiness in sale of furniture. What is evident is that the petitioner had wrongly attempted to transitioned a credit of Rs. 3,86,271/- hoping that in case of future tax liability, the petitioner can use the same against the tax liability. Thus, the intention of the petitioner was not bonafide. 15. After Show Cause Notice was issued to the petitioner on 09.05.2019, the petitioner replied and admitted the mistake by a reply dated 04.02.2020. The petitioner also reversed the transitional credit in the returns filed for the month of January 2019-20 in Form GSTR-3B under Rule 61(5) of the TNGST Rules, 2017. There are no records to show utilization of such credit. 16. Thus, the facts on record indicates that though an improper attempt was made by the petitioner to transition the aforesaid credit. The petitioner had however not utilized the same and had also reversed the same on 10.02.2020 after a Show Cause Notice were issued within a period prescribed under Section 73 of TNGST Act, 2017 by invoking Section 74 of the TNGST Act, 2017. However, the Show Cause Notice does not invoke the ingredients to justify the invocation of Section 74 of the TNGST Act, 2....
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....redit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "Or" appearing in Rule 14, twice, could be read as "AND" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole we find no reason to read the word "OR" in between the expressions 'taken' or 'utilized wrongly' or 'has been erroneously refunded' as the word "AND". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest" 19. The ratio in the above case is to be distinguished on facts as in the present case although credit was wrongly attempted to be transitioned, it was never utilized. Further before levying penalty or interest, a proper excise was required to be made by a proper officer under Section 74(10) after ascertaining whether the credit was wrongly availed and wrongly utilised. Though under Sections 73(1) and 74(1) of the Act, proceedings can be initiated for mere wrong availing of Input Tax Credit followed by impos....
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....er TNVAT Act, 2006. But the unavailed capital goods ITC as per VAT returns was Rs. 229850/-. Hence, the excess amount of Rs. 156421/- is not allowable. In respect of the amount Rs. 229850/-, the dealer submitted invoices. On detailed scrutiny, it is found that, 1) though the dealer has registered himself as star hotel, the dealer does not possess the mandatory certificate from the Tourism Department, meaning that the dealer cannot avail ITC under Sec. 7(1)(a) of the TNVAT Act, 2006. 2) since the dealer is a hotelier, he comes under Sec. 7(1)(b), read with Sec. 7(2) of the TNVAT Act, 2006, where ITC is not available. Document 2 3) on verification of the invoices it is found that the dealer had purchased mattresses, pillows, electrical goods, water heater, plywoods, paints, etc. i.e. those goods which go into the making of the hotel for accommodation purpose. As per Sec. 17(5)(d) of TNGST Act, 2017, ITC in respect of the goods/services used for the construction of immovable property, is blocked. 4) As per Sec. 140(2) of the TNGST Act, 2017, the ITC claimed through TRAN 1 must be admissible under both the TNVAT Act and the TNGST Act. But ....