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2024 (10) TMI 1005 - HC - GSTRefund of Input Tax Credit (ITC) accrued to the petitioner under the Value Added Tax (VAT) regime - Transition to GST regime - petitioner s contention based on Section 143(8)(b) is that when an assessment is carried out and a refund is ordered then necessarily, the same shall be refunded to the assesee as per clause (8)(b) of Section 142 - HELD THAT - Sub-section (a) of Section 18 is the enabling provision, which benefit is reflected in the Transitional Provisions under Section 140, permitting a business registered under the VAT provisions; in which regime too there existed ITC, to carry forward that credit to be availed as set off under the GST regime for the inputs held in stock; whether it be in the semi-finished or finished form, as on the date the business becomes liable to pay tax under the GST regime. Sub-section (2) prohibits any credit to be availed after the expiry of one year from the date of issue of tax invoice relating to such supply. As far as the transitional claims are concerned there is a further limitation prescribed as on 27.12.2017 and then of course, as per the Hon ble Supreme Court s directions there was a window of two months provided. Unless the claim is made in Form GSTR TRAN-1 within the time initially provided or that provided later, to get over the teething problems, there can be no claim raised even for credit of input tax and its set off and never of a refund in cash. There are no reason to interfere with the order rejecting the claim for refund, which refund in any event is not applicable, and the petitioner can only claim ITC as set-off against the output tax. Petition dismissed.
Issues:
Claim for refund of Input Tax Credit (ITC) accrued under the Value Added Tax (VAT) regime; interpretation of provisions under the CGST Act, 2017 regarding carry forward of ITC; applicability of Section 142(8)(b) in the case of refund claim; comparison with a judgment of the Punjab and Haryana High Court; analysis of Sections 16 and 18 of the Goods and Services Tax Act, 2017 in relation to ITC claims. Analysis: The petitioner, an assessee under the CGST Act, 2017, sought a refund of Input Tax Credit (ITC) accrued during the VAT regime. The petitioner claimed a total ITC of Rs. 1,88,60,453.42 during the VAT period, but only claimed Rs. 1,68,78,801/- for carry forward under the GST regime. The Assessing Officer allowed the entire claim, including the excess ITC of Rs. 19,81,652, but the refund was not permitted. The petitioner argued based on provisions of Section 140 and 142(8)(b) for ITC carry forward and refund, but the court found the argument fallacious as unclaimed ITC cannot be refunded in cash, only set off against output tax. The court analyzed Section 142(8)(b) which deals with refund of tax, interest, fine, or penalty under the earlier law, emphasizing that unclaimed ITC cannot be refunded in cash. The court dismissed the petitioner's claim for refund, stating that the ITC available can only be claimed as a set-off against output tax, not as a cash refund. The court also highlighted that the petitioner did not avail the additional period provided for claims under Section 140, further weakening the refund claim. The court compared the present case with a judgment of the Punjab and Haryana High Court, emphasizing that the circumstances and legal provisions differed. The court noted that the petitioner voluntarily did not include the unclaimed ITC in the transitional form and did not revise it within the stipulated time, thus disentitling the petitioner from a cash refund. The court highlighted the statutory provisions under Section 16 and 18 of the GST Act, which outline the conditions and restrictions for claiming ITC, emphasizing that ITC can only be claimed as a credit and not as a cash refund. The court concluded that there was no basis to interfere with the order rejecting the refund claim, as the petitioner could only claim ITC as a set-off against output tax, not as a cash refund. Therefore, the writ petition was dismissed, affirming the rejection of the refund claim.
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