2017 (10) TMI 250 - HC - GST

Refund of amount of compensation cess paid under the impugned legislation - Appropriate directions are accordingly sought by the Petitioner in this application, to the Respondents to amend the Form Tran-I and simultaneously GSTR -3B and GSTR-1, GSTR-2 and GSTR-3 where utility of Cess is to be shown and/ or carried forward as cess or any other appropriate directions to the Respondents so that the Applicant/Petitioner could use the credit of cess already paid on the stock held on 30th June 2017 in terms of the order dated 25th August 2017 of this Court. Held that - it is directed that the Petitioner will continue to pay the taxes as and when they fall due after availing and utilizing the credit for the cess already paid. This will, however, be subject to the final orders passed by this Court - As regards to the non-filing of returns by the Petitioner on the due dates, till such time an appropriate method/system is evolved by the Respondent which would facilitate utilization of the credit and provide for it in the returns filed electronically, the Respondents will not take any coercive steps against the Petitioner for the failure to file such electronic returns on time.

Summary

Issues:
1. Clerical error correction in the order dated 25th August 2017.
2. Petitioner's inability to take credit of Clean Energy cess paid.
3. Challenges in utilizing credit under the GST regime.
4. Request for directions to amend forms for utilizing cess credit.
5. Permission to pay taxes manually until appropriate method is evolved.
6. Response from the Central Board of excise and Customs (CBEC) regarding credit utilization.
7. Court's directive on tax payment and filing returns.

Analysis:
1. The judgment begins with the correction of a clerical error in the order dated 25th August 2017. The corrected paragraph clarifies the entitlement of the Petitioner to a refund of compensation cess paid under the impugned legislation upon succeeding in the present petition.

2. The Petitioner highlights their inability to take credit of the Clean Energy cess already paid, amounting to around ?7.86 crores on coal stocks as of 30th June 2017. This inability arises due to the absence of a column in the forms developed by the Respondents for utilizing such credit in tax payments.

3. Under the GST regime, the Petitioner faces challenges in availing credit, as various forms like Form Tran-I need to be filed for transitional input credit and stock statement. The Petitioner's credit of old Cess is automatically pulled from Tran-1, but the credit is carried forward as CGST, limiting its set-off against CGST and IGST, not against the cess.

4. Seeking appropriate directions, the Petitioner requests amendments to forms like Tran-I, GSTR -3B, GSTR-1, GSTR-2, and GSTR-3 to show the utility of Cess and enable the Petitioner to use the credit of cess paid on stock as of 30th June 2017 in line with the court order.

5. The Petitioner, being an honest taxpayer, requests permission to pay taxes manually until the Respondents evolve a suitable method. This request aims to ensure compliance with tax obligations while awaiting a resolution to the credit utilization issue.

6. The response from the CBEC outlines the process of evolving an appropriate method to allow the Petitioner to avail credit either on an IT platform or manually. The Petitioner is directed to cooperate by providing necessary information for implementing the court's order.

7. The Court directs that the Petitioner can continue paying taxes after utilizing the cess credit, subject to final orders. Until a system is developed by the Respondents for electronic filing that facilitates credit utilization, no coercive steps will be taken against the Petitioner for late filing of returns.

This detailed analysis of the judgment addresses the issues raised by the Petitioner regarding the correction of errors, challenges in credit utilization, and the need for amendments to forms under the GST regime, providing a comprehensive overview of the legal proceedings and directives.