2023 (1) TMI 676 - HC - GST

Refund of accumulated ITC - inverted tax structure - Right to file an appeal - time limitation - HELD THAT - The 'three respondents' are collectively referred to as 'State' or 'Revenue'. Revenue certainly has a right to file an appeal under Section 112 of C-G ST Act as right of appeal is a statutory right. This writ Court is informed without any disputation or contestation by both sides that Tribunal qua Section 112 of C-G ST Act is yet to be constituted. This means that it is open to State to file a writ petition in this Court assailing aforementioned two orders of Appellate Authority. This Court is informed that the limitation i.e., prescribed period of limitation qua appeal to Tribunal under Section 112 of C-G ST Act is six months from the date of the order of Appellate Authority. That six months in the case on hand is yet to elapse but it is in the anvil - A careful perusal of this Order and more particularly paragraph 2 of this Order and to state with greater specificity paragraph 2(b) (i) (ii) of this Order shows that later of two dates can be taken into account for arriving at the reckoning date. As this Order is not under challenge before this Writ Court, the questions as to whether this Order will apply, whether it would pass muster qua Rule making powers under parent Statute and whether the Revenue has to file a writ petition within prescribed time (limitation). It is deemed appropriate to direct the first respondent to take up the representations dated 14.11.2022 and consider the same on merits after eight weeks from today i.e., after 10.03.2023 - Petition disposed off.

Summary

Issues: Refund of accumulated Input Tax Credit under the Central Goods and Services Tax Act, 2017; Delay in processing refund applications; Applicability of the Puducherry Goods and Services Tax Order on the limitation period for filing appeals.

Refund of Accumulated Input Tax Credit:
The judgment pertains to two writ petitions under the Central Goods and Services Tax Act, 2017, concerning the refund of accumulated Input Tax Credit (ITC) due to an inverted tax structure. The petitioner, a manufacturer and supplier of Wind Operated Electricity Generators, had higher input costs compared to the tax rate on the supplied product, resulting in accumulated ITC. The petitioner filed refund applications under Section 54 of the Act, which were initially rejected by the Original Authority but later allowed by the Appellate Authority. Subsequently, the petitioner sent reminders for the refund, leading to the filing of the writ petitions to compel the authorities to act on the refund orders. The court considered the facts and directed the first respondent to review the representations for refund, ensuring a decision by a specified date.

Delay in Processing Refund Applications:
The delay in processing refund applications was a key issue in the judgment. The court acknowledged the pendency of the refund applications and the petitioner's representations seeking action on the refund orders. It emphasized the need for timely disposal of such applications and directed the first respondent to consider the representations within a specified timeframe, ensuring a decision by a set deadline. The court's directive aimed to expedite the resolution of the refund claims and uphold the petitioner's entitlement to the refunds as determined by the Appellate Authority.

Applicability of the Puducherry Goods and Services Tax Order:
The judgment also addressed the applicability of the Puducherry Goods and Services Tax Order on the limitation period for filing appeals to the Tribunal under Section 112 of the Central Goods and Services Tax Act, 2017. The court noted the provisions of the Order specifying the reckoning date for the appeal period and highlighted the State's right to challenge the Appellate Authority's orders through a writ petition. While leaving the questions regarding the Order's validity and the State's obligation to file a timely writ petition open, the court directed the first respondent to process the representations for refund promptly, allowing the State to pursue its remedies within the legal framework.

In conclusion, the judgment addressed the issues of refund of accumulated Input Tax Credit, delay in processing refund applications, and the implications of the Puducherry Goods and Services Tax Order on appeal timelines. By providing specific directives to the first respondent and allowing the State to pursue its legal remedies, the court sought to ensure a fair and timely resolution of the refund claims while upholding the statutory rights and obligations under the Central Goods and Services Tax Act, 2017.