2022 (4) TMI 51 - HC - GST

Refund in the event of reversal of Input Tax Credit carried forward by filing Form TRAN-1 - Transitional scheme - Section 142(3) of the GST Act read with the erstwhile provisions under the TNVAT Act - HELD THAT - As has been rightly pointed out by the learned counsel for the petitioner, that on 23.05.2016 a reply-cum-request has been made by way of an application requiring the erstwhile VAT authorities to consider the refund claimed by the petitioner, for which supporting documents have been annexed - the said request having been acknowledged by the concerned Assistant Commissioner on 23.05.2016 itself, followed by the reminder dated 30.12.2016, the same ought to have been considered and decided on merits and disposed of there itself. They waited till the TNVAT regime to come to an end on the introduction of the GST regime from 01.07.2017, before which no orders seems to have been passed by the Revenue for the refund claimed by the petitioner. Even in respect of the applications which were filed and pending before the appointed date ie., 01.07.2017, the same could have been disposed of under the existing law ie., the TNVAT Act, which is possible under the transitional provision viz., Section 142(3) of the GST Act, which in fact has been quoted by the very respondent in the impugned order - When that being so, it is not known as to what was the difficulty of the Revenue to decide such refund claim filed by the petitioner within the meaning of Section 142(3) of the GST Act read with the erstwhile provisions under the TNVAT Act. Without considering the application of the petitioner for refund, the present order of reversal of the alleged inadmissible input tax credit with penalty and interest was made. Therefore, the impugned order cannot be proceeded further. This Court is inclined to dispose of this writ petition - petition disposed off.

Summary

Issues:
1. Refund claim under TNVAT Act regime not considered under GST regime
2. Non-filing of Form-W within prescribed time limit
3. Interpretation of Section 142(3) of the GST Act
4. Validity of impugned order demanding inadmissible input tax credit

Analysis:
1. The petitioner sought a Writ of Certiorarified Mandamus to challenge the impugned order refusing refund under TNVAT Act regime. The petitioner, a manufacturer and exporter of Granite Slabs, claimed refund due to unutilized Input Tax Credit. Despite submitting necessary documents, the refund request was not decided before the transition to the GST regime on 01.07.2017. The Court noted that the refund application should have been considered under the TNVAT Act before the GST regime, as per Section 142(3) of the GST Act.

2. The respondent argued that the petitioner failed to file Form-W within the prescribed 180-day limit under TNVAT Act, rendering the refund claim ineligible. However, the Court emphasized that the documents were submitted in time and the delay in processing the claim was on the Revenue's part. The Court directed the respondent to consider the application with a personal hearing for both parties and keep the impugned order in abeyance until the refund claim is evaluated.

3. The interpretation of Section 142(3) of the GST Act was crucial in determining the validity of the refund claim. The Court highlighted that the transitional provision allowed for the disposal of pending refund claims under the existing law, i.e., TNVAT Act, even after the introduction of the GST regime. The Court found that the respondent's failure to consider the petitioner's application under Section 142(3) before passing the impugned order was unjustified.

4. The impugned order demanding inadmissible input tax credit with penalty and interest was deemed unsustainable due to the failure to consider the petitioner's refund claim under the TNVAT Act within the transitional provisions of the GST Act. The Court directed the respondent to reevaluate the refund claim based on the documents submitted by the petitioner and provide a decision promptly. The writ petition was disposed of with these directions, emphasizing the importance of adhering to legal provisions during the transition between tax regimes.