9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (6) TMI 1374 - HC - GSTRefund of the accumulated credit in account on account of inverted tax structure under Proviso of Section 54(3) read with Rule 89(5) of the Central Goods and Service Tax Rules, 2017 - accumulation of credit on the ground that the rate of tax on the inputs are higher than the rate of tax on output supply of goods - HELD THAT - Without entering into the merits of the matter, the impugned order passed by the appellate authority as well as order of the adjudicating authority rejecting the refund claim of the petitioner in respect of ten refund applications as enumerated in the appellate order are hereby quashed and set aside and the matter is remanded back to the adjudicating authority respondent No. 2 for de novo consideration of refund claims made by the petitioner in accordance with law. Petition disposed off by way of remand.
Issues:
Challenge to Order-in-Appeal dated 25th November, 2021 under Article 227 of the Constitution of India regarding refund of accumulated Input Tax Credit (ITC) due to inverted tax structure. Detailed Analysis: 1. Challenge to Order-in-Appeal: The petitioner, a manufacturer of grey fabrics, challenged the Order-in-Appeal dated 25th November, 2021, passed by the Commissioner of CGST & Central Excise, Surat. The challenge was based on the denial of refund of accumulated ITC due to an inverted tax structure as per Proviso of Section 54(3) read with Rule 89(5) of the Central Goods and Service Tax Rules, 2017. 2. Accumulation of Credit: The petitioner purchased polyester yarn as raw material falling under Chapter Heading 5402 and availed input tax credit at 12%. Due to the higher tax rate on inputs compared to the output supply of grey fabrics falling under Chapter Heading 5407, there was an accumulation of credit in the petitioner's electronic credit ledger. 3. Notification Restrictions: Initially, refund of accumulated ITC for grey fabrics was restricted by Notification No. 5/2017-CT (Rate) dated 28th June, 2017. However, this was later amended by Notification No. 20/2018-CT(Rate) dated 26th July, 2018, allowing for the refund of accumulated ITC subject to certain conditions. 4. Reversal of ITC: To comply with the amended notification, the petitioner reversed the accumulated ITC for the period July 2017 to July 2018, as per Circular No. 56/30/2018-GST issued by the Central Board of Indirect Taxes & Customs (CBIC). 5. Rejection of Refund Claim: The respondent rejected the refund claim on the grounds of non-payment of interest on the reversed ITC. The appellate authority upheld this decision, leading to the petitioner challenging the orders on the basis of lack of show-cause notice and denial of opportunity to be heard. 6. Court Decision: The High Court quashed and set aside the impugned orders, remanding the matter back to the adjudicating authority for fresh consideration of the refund claims. The Court directed the authority to complete the review within 12 weeks from the date of the order, providing an opportunity for the petitioner to address the issue of interest payment. 7. Conclusion: The petition was disposed of with the mentioned directions, and the notice was discharged, allowing for a reevaluation of the refund claims in accordance with the law and principles of natural justice.
|
