2021 (4) TMI 419 - HC - GST

Re-credit of I.T.C. in the electronic credit ledger - interest on delayed refund - HELD THAT - Considerable court's time has been consumed in trying to unravel the purport of the order at Annexure-5 in the light of the equivocal stand of the respondent State and the reply of the GSTN quoted. However, because of the ambivalence on the part of the respondent State no concrete answer is yet discernable. If the refund claim has been purportedly rejected and the order of re-credit has also been passed in Form GST PMT 03 (Annexure-6), why has it not been re-credited to the Electronic Credit Ledger of the petitioner. Matter be listed on 20.04.2021. Affidavit in response, if any about the outcome of the exercise be brought latest by 17.04.2021.

Summary

Issues:
1. Ambiguity regarding re-credit of I.T.C refund to electronic credit ledger.
2. Lack of clarity on the rejection of refund claim and subsequent re-credit.
3. Involvement of Goods and Service Tax Network (GSTN) in the matter.
4. Legal provisions under Section 56 of the JGST Act, 2017 concerning interest on delayed refund.

Analysis:
1. The judgment revolves around the ambiguity concerning the re-credit of Input Tax Credit (I.T.C) refund to the electronic credit ledger of the petitioner. Despite the rejection of the refund claim, the order for re-credit in Form GST PMT 03 has not been executed, leading to confusion and unresolved issues.

2. The lack of clarity on the rejection of the refund claim and subsequent re-credit is a significant concern. The court deliberated on the order at Annexure-5 issued by the DCST (INCH.) Giridih Circle, Giridih, and Annexure-6 issued by the DCCT (INCH.) Giridih Circle, Giridih, which mandates re-crediting the amount to the cash or credit ledger upon rejection of the refund claim.

3. The involvement of the Goods and Service Tax Network (GSTN) further complicates the matter. The GSTN provided details on the refund applications and highlighted the manual processing and rejection of ITC refund applications without re-crediting the amount to the petitioner's ITC ledger. The GSTN communicated efforts to rectify errors and expedite resolution with state authorities.

4. Legal provisions under Section 56 of the JGST Act, 2017, concerning interest on delayed refunds, were cited by the petitioner's counsel. The court emphasized the need for a concrete resolution, given the respondent State's ambivalence and the petitioner's unreceived re-credit of I.T.C to the electronic credit ledger despite the purported rejection of the refund claim.

In conclusion, the judgment underscores the necessity for a clear resolution regarding the re-credit of I.T.C refund, highlighting the complexities arising from the rejection of the refund claim, involvement of GSTN, and legal provisions governing delayed refunds under the JGST Act, 2017. The court directed the respondent State to provide a concrete answer and resolve the issue promptly, setting a deadline for cooperation and further appearance if needed.