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TMI Blog2019 (7) TMI 1395X X X X Extracts X X X X X X X X Extracts X X X X ..... at Goods and Services Tax Rules read with Form GST TRAN-1 provides the mechanism for computing the input tax credit attributable to pending declaration forms. The grievance as sought to be redressed should not survive - this writ-application is disposed of without going into the issue as regards the legality and validity of clause 12.5(c) of Part IV of Form 205B prescribed by the Notification No.(GHN-05) VAR-2018(47)/TH dated 19.1.2018. - R/SPECIAL CIVIL APPLICATION NO. 4711 of 2018 - - - Dated:- 17-7-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Petitioner (s) : MR UCHIT N. SHETH For The Respondent (s) : MR KAMAL B. TRIVEDI, ADVOCATE GENERAL with MS MAITHILI MEHTA, AGP ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE J. B. PARDIWALA) 1. By this writ-application under Article 226 of the Constitution of India, the writ-applicants have prayed for the following reliefs : A. This Hon'ble Court may be pleased to issue a writ striking down and declaring clause 12.5(c) of Part IV of Form 205B prescribed by Notification No.(GHN-05) VAR- 2018( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroduction of the GST regime the Petitioners duly migrated and got registered under the Central/State/Integrated Goods and Services Tax Act, 2017 (hereinafter collectively referred to as the GST Acts ). 4. The goods manufactured by the Petitioners in the State of Gujarat are either sold locally or in the course of inter- State trade and commerce or they are transferred to branches of the Petitioners located outside the State of Gujarat. 5. Under the VAT Act the Petitioners claimed input tax credit of tax paid on purchases of raw materials from registered dealers of the State of Gujarat. Such input tax credit was utilized for payment of tax under the VAT Act on sales made within the State of Gujarat as permitted and required under Section 13 of the VAT Act. Excess input tax credit, if any, was utilized for making payment of tax liability under the Central Act as permitted and required by Rule 18 of the VAT Rules. Any further outstanding tax credit was carried forward to returns of the subsequent tax period. 6. The Petitioners admitted and paid tax liability under the Central Act on inter-State sale transactions to registered de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) was added in Rule 44 of the VAT Rules providing for furnishing of final return under the VAT Act. Relevant extract of the rule reads as under: 44(4) Every registered dealer whose taxable turnover is more than rupees twenty five lakh for the period from 1st April, 2017 to 30th June, 2017, Shall furnish, by way of uploading on the website, a final return for such period within seven months from 1st July, 2017 as follows: ( i) in Form 202 in case of a registered dealer who furnishes return under sub-rule (3) of rule 19, and ( ii) in Form 205B alongwith the information in respect of inventories in Form 201C in case of a registered dealer other than referred to in clause (i) above. Provided that xxxx 12. The forms for filing of the final return have also been prescribed in the very same notification. The time limit for furnishing such final return has been extended up to 31.3.2018. 13. On coming to know of such newly introduced provision, the Petitioners approached their tax consultant for the purpose of filing of the final return. The learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e VAT Act then the same can be adjusted against liability under the Central Act and the balance can be carried forward to the return of the subsequent tax period. 18. It is respectfully submitted that the Petitioners had duly calculated and paid the amount of tax payable in the monthly returns filed in Form 201 for the months of April to June 2017. Such payment was in accordance with the provisions of the VAT Act with the rules made thereunder. The rule for furnishing of final return is only a procedural rule introduced because of migration into the GST regime. Clause 12.5(c) in Part IV of Form 205B read with annexure V which seeks to create fresh liability upon the Petitioners on the basis of outstanding statutory declaration forms as on 30.6.2017 without there being any statutory provision to support such liability is ultra-vires the provisions of the VAT Act as well as the rules framed thereunder. 19. In any case it is respectfully submitted that Section 13 of the VAT Act only empowers the Government to prescribe the manner in which the net amount of tax is to be calculated. The said provision does not empower the Government to disallow input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Act on the ground of outstanding declaration forms. 23. The Petitioners may clarify that the excess input tax credit of ₹ 2,16,248/- as per the return under the VAT Act ending on 30.6.2017 was carried forward to the GST Acts. However later on when it came to the notice of the Petitioners that they had outstanding declarations under the Central Act benefit of such credit has not been taken by reducing the admissible input tax credit in the subsequent return submitted under the GST Acts. Thus actually no benefit of excess credit under the VAT Act is taken under the GST Acts. 3. The grounds of challenge as urged in the memo of the writapplication are as under : A. The impugned clause 12.5(c) of Part IV of the final return as prescribed in Form 205B is ultra-vires the provisions of the VAT Act as well as the rules framed thereunder. The said clause read with Annexure V of Form 205B requires reduction of input tax credit under the VAT Act to the extent of outstanding declaration forms as on 30.6.2017 under the Central Act even before such credit is adjusted against crystalized liability under the VAT Act and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have no liability as per the provisions of the VAT Act. It is therefore respectfully submitted that clause 12.5(c) of Part IV of Form 205B as well as Annexure V of the said form deserve to be struck down and declared as contrary to the provisions of the VAT Act and the rules framed thereunder. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANTS : 4. Mr.Uchit N.Sheth, the learned counsel appearing for the writ-applicants, has tendered his written arguments. The written arguments are as under : ( 1) Input tax credit to be computed as per the provisions of the VAT Act and the rules made thereunder. Form cannot override substantial provisions Impugned clause 12.5(c) of Part IV of Form 205B prescribed by Notification No. (GHN-05) VAR-2018(47)/TH dated 19.1.2018 and Annexure V to the said Form 205B is ultravires the provisions of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as the VAT Act ) as well as the Gujarat Value Added Tax Rules, 2006 (herein after referred to as the VAT Rules ). Input tax credit is admissible as per Section 11 of the VAT Act and Section 13 of the VAT Act provides for paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT Rules framed thereunder. ( 2) Input tax credit already utilized in the month returns and the same cannot be sought to be readjusted by way of a column in final return It is respectfully submitted that input tax credit was already availed and utilized as per the provisions of the VAT Act and the VAT Rules in the monthly returns filed in Form 201 for the months of April to June 2017. Such tax credit cannot be sought to be reduced by simply providing for a column in the prescribed final return. It is well settled that input tax credit is as good as tax paid and it creates a vested right in favour of the assessee. Reference may be made in this regard to the judgement of Hon. Supreme Court in the case of Eicher Motors Ltd. v/s Union of India 1999 (106) ELT 3 (SC) (Page 1 of the compilation) and Commissioner of Central Excise, Patna v/s New Swadeshi Sugar Mills (2016) 1 SCC 614 (Page 4 of the compilation). Providing for reduction of input tax credit availed and utilized as per the provisions of the VAT Act and the rules made thereunder by simply prescribing a column in the form of final return is without competence, arbitrary and illegal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se 12.5(c) of Part IV of Form 205B is ultra vires the provisions of the Value Added Tax Act, 2003. 7. Mr.Trivedi submitted that the grievance raised by the writapplicants is that the input tax credit with regard to the purchases made in the months of April, May and June 2017 respectively is consumed while filling the Form 201 prescribed under the Act, and in such circumstances, such credit would not be adjusted in accordance with clause 12.5(c) of Part IV of Form 205B. Mr.Trivedi submitted that the input tax credit shown in the monthly return in Form 201 for the months of April, May and June 2017 will be allowed against the admitted output tax in accordance with the monthly return in Form 201 and thereafter if any input tax credit remains, the same would be reduced in accordance with Annexure-V to Form 205B. Mr. Trivedi further submitted that the brought-forward input tax credit as well as the input tax credit to be carried forward from 1.7.2017 onwards would be adjusted as per clause 12.5(c) of Part IV of Form 205B. 8. Mr.Trivedi gave us more than a fair idea as to how Rule 117 of the Gujarat Goods and Services Tax Rules read with Form GST TRAN-1 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 26,000 = -₹ 7,500/-) will be considered as tax payable at the time of the assessment/provisional assessment for that year. ( h) Now, as and when, 'C' Forms are produced, then in that eventuality, as provided in third proviso to sub-section (1) of Section 140 of Gujarat GST Act, the assessee would be given refund of ₹ 18,500/- on one hand and on the other, no question would arise about assessing any liability with reference to the above referred ₹ 7,500/- ( i) Pertinently in case of the petitioner company, total contingent CST liability is in the order of ₹ 44,04,47,806/- for non-production of 'C' and 'F' Forms. As against this, its carried forward ITC is to the tune of ₹ 2,16,248/- and on adjustment, the ITC balance would become Nil and the remainder amount (i.e. ₹ 2,16,248 ₹ 44,04,47,806 = -₹ 44,02,31,558/-) would be considered as tax payable at the time of assessment/ provisional assessment of that year. However, on production of the said Forms 'C' and 'F', the petitioner would be given refund of ₹ 2,16,248/- on one hand and on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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