2026-VIL-1224-GUJ
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VAT High Court Cases

Gujarat VAT Act, 2003 - Set-off of tax payable under the VAT Act against available Input Tax Credit, Remedy against excess credit carried forward through TRAN-1 - Respondent had Input Tax Credit disallowed by the Assessing Officer for the period prior to GST, without adjusting the tax liability – Dept-Appellant contended that excess credit was wrongly availed in TRAN-1 contrary to the GST Act - Whether the Tribunal erred in permitting set-off of the VAT liability against the available credit and directing recalculation, despite the excess credit carried forward in TRAN-1 - HELD - It is not in dispute that the available credit recorded by the Assessing Officer exceeded the tax payable under the VAT Act, so the Tribunal was justified in permitting set-off and directing the balance credit to be carried forward - Rule 117(3) of the GST Rules allows the credit specified in TRAN-1 to be credited to the electronic credit ledger. Rule 121 provides that where the credit so credited is found to be wrongly availed, proceedings under Section 73 or Section 74 of the GST Act may be initiated in respect of the credit wrongly availed, wholly or partly. The Assessing Officer ought to have informed the concerned GST Department of the credit not available to the Respondent - The Respondent was entitled to the credit only to the extent recorded by the Tribunal. The decisions relied upon by the Dept, though accepted, do not apply on these facts, since it is for the GST Department to act under Rule 121 for wrong credit availed through TRAN-1, and the only remedy of the VAT Department is to inform the GST Officer of such facts - Tribunal justified under the VAT Act in allowing set-off of tax payable against available credit, no infirmity in its order - The appeal is dismissed
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