2022 (8) TMI 589 - HC - GST

Principles of natural justice - adjustment of the amounts paid by the Petitioner under the Integrated Goods Services Tax Act 2017 towards the alleged dues determined under Central Goods Services Tax Act 2017 Andhra Pradesh State Goods Services Tax Act 2017 - Works Contract - HELD THAT - Though various grounds are raised learned counsel for the petitioner mainly submits that when the nature of transaction is admitted the authorities ought to have adjusted the amount paid by him towards I.G.S.T. In any event he would contend that he will pay the C.G.S.T. and S.G.S.T. due to the authorities and thereafter he may be permitted to claim refund of the amount paid towards I.G.S.T. - The same is not seriously opposed by the learned Government Pleader for Commercial Tax. Even in the assessment order dated 05.10.2020 passed by respondent No.1/Assistant Commissioner (ST) Kurupam Market Circle Visakhapatnam it is held that the office cannot make adjustment of I.G.S.T. into C.G.S.T. and S.G.S.T. The taxable person may claim refund of I.G.S.T. after payment of C.G.S.T. S.G.S.T. and in view of the same the objections filed by the taxable person were held not tenable. The present Writ Petition is disposed of directing the petitioner to pay C.G.S.T. and S.G.S.T. within a period of three (3) weeks from today and thereafter make a claim for refund of the amount under I.G.S.T. which the petitioner is entitled to before respondent No.1 in which event respondent No.1 shall deal with the same as early as possible preferably within a period of four (4) weeks thereafter.

Summary

Issues:
1. Jurisdictional validity of tax order dated 30.12.2021
2. Adjustment of Integrated Goods & Services Tax (I.G.S.T.) towards Central Goods & Services Tax (C.G.S.T.) and Andhra Pradesh State Goods & Services Tax (S.G.S.T.)
3. Refund claim process for I.G.S.T.

Analysis:
1. The petitioner, a Works Contractor, challenged the tax order dated 30.12.2021, alleging it to be void, arbitrary, and illegal under the Central Goods and Services Tax Act, 2017 and Andhra Pradesh State Goods and Services Act, 2017. The petitioner contended that the order was without jurisdiction, violated principles of natural justice and constitutional articles, and lacked valid reasons. The petitioner sought a writ of mandamus to declare the order as such. The High Court disposed of the writ petition at the admission stage, directing the petitioner to pay C.G.S.T. and S.G.S.T. within three weeks and claim a refund of the I.G.S.T. amount, which was to be dealt with by the tax authorities promptly.

2. The petitioner collected I.G.S.T. on interstate transactions and remitted it to the government. However, the tax authorities proposed treating the transactions as intrastate, leading to the imposition of C.G.S.T. and S.G.S.T. The petitioner requested an adjustment of the I.G.S.T. amount towards the dues under C.G.S.T. and S.G.S.T., which was rejected. The High Court noted that the nature of the transaction was not in dispute and directed the petitioner to pay the due C.G.S.T. and S.G.S.T. amounts within three weeks. The petitioner was allowed to claim a refund of the I.G.S.T. amount, which the tax authorities were instructed to process promptly.

3. The tax authorities held that the adjustment of I.G.S.T. into C.G.S.T. and S.G.S.T. was not permissible, and the taxable person could claim a refund of I.G.S.T. after paying C.G.S.T. and S.G.S.T. The High Court, considering the uncontested nature of the transaction, directed the petitioner to pay the due C.G.S.T. and S.G.S.T. amounts within three weeks. Subsequently, the petitioner could claim a refund of the I.G.S.T. amount, which the tax authorities were mandated to process expeditiously, preferably within four weeks. The court concluded the judgment without imposing any costs and closed any pending miscellaneous petitions related to the writ petition.