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TMI Blog2019 (7) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... of input tax credit against future liabilities of the petitioner for a sum of Rs. 18,33,304.76 and Rs. 20,79,256.00 which amount is lying with the respondent department in terms of order of assessment for the financial year 2007-08 and 2011-12. (c) For holding and a declaration that once the respondent department is holding in hand the excess of input tax credit already standing to the credit of the petitioner the same has to be given adjustment against future liabilities and a denial of such adjustment would be an act giving rise to unjust enrichment and also would be violative of Article 265 of the Constitution of India. (d) For restraining the respondents specially the respondent no.3 from taking any coercive action against the petitioner for recovery of the said demand as contained in the impugned order dated 6.11.2018." When this matter is taken up for consideration Mr. Gautam Kejriwal, learned counsel appearing for the petitioner in reference to the supplementary affidavit filed on 12.2.2019 has submitted that he would be restricting the present writ petition to the relief prayed in paragraph 1(a) of the writ petition and in so far as the rejection by the statutory auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is enclosed with the assessment order at Annexures 2 series. As indicated, the assessment orders so passed for the period in question i.e. 2007-08 and 2011-12 shows input tax credit admissible to the petitioner to the tune of Rs. 18,33,304.76 and Rs. 20,79,256.00 and has attained finality because it has not been appealed against. According to the petitioner, though he was entitled to carry forward this input tax credit but due to inadvertent mistake of the Accountant, this was not reflected in the returns filed for the subsequent years and it is only in 2017 that the mistake of unadjusted input tax credit of Rs. 18,33,304.76 for the period 2007- 08 and Rs. 20,79,256.00 for the financial year 2011-12 was detected. A refund application in the statutory form was filed, copies of which is at Annexures 3 series and in so far as the refund application for the financial year 2007-08 is concerned, it has been rejected, inter alia, on grounds that it was time barred. Copy of the order dated 12.6.2017 is at Annexure 4. Mr. Kejriwal has fairly submitted that the statement at paragraph-16 of the writ petition that, the petitioner has filed a writ petition to question such rejection, is a bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax quantified at Rs. 4,27,387.00 that a demand of Rs. 56,18,089.00 was raised which is followed by a demand notice and feeling aggrieved the petitioner is before this Court. Mr. Kejriwal, learned counsel for the petitioner while straightway inviting the attention of this Court to Section 140 of 'the BGST Act' submitted that the same enables the taxpayers to carry forward the input tax credit under the Value Added Tax Act and/or Entry Tax Act, as the case may be, to his electronic credit ledger and for which a period has been prescribed. According to Mr. Kejriwal, it is under this enabling provision that the petitioner filed his application at Annexure 5 to carry forward the input tax credit earned by the petitioner under 'the VAT Act' and 'Entry Tax Act' which application according to Mr. Kejriwal was within time. According to the learned counsel, the respondent Assistant Commissioner of State Taxes in absolute abuse of statutory power while rejecting the said application, has proceeded to exercise jurisdiction under section 73 of 'the BGST Act' and since according to respondent no.3, the petitioner had wrongly availed input tax credit under 'the VAT Act' and 'Entry Tax Act', th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o invite a proceeding under section 73 of 'the Act' until such time that the respondents by reference to records are able to demonstrate that the said credit was either availed of or utilized by the petitioner. As regarding utilization of the input tax credit of Rs. 96,077/- is concerned, learned counsel submits that apart from the fact that this credit is not relatable to the financial year 2007-08 or 2011-12, the said amount was remitted back and shown in the return filed for the month of August, 2018. He submits that similarly in so far as the tax for the period October, 2018 is concerned, the deficit amount of Rs. 55,134/- was deposited and thus, the petitioner has never availed credit or utilized credit so reflected in the ledger for the period 2007-08 or 2011-12. In reference to the credit balance reflected in the ledger of the petitioner at Annexure 7 he submits that while the opening balance shown in July, 2017 reads Rs. 43,21,945.00, the said balance has more or less remained at the same position. It is the specific case of Mr. Kejriwal that never has the petitioner claimed any credit rather as on date the petitioner has paid all his taxes and thus, there cannot be any iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as for raising of the demand. Having heard learned counsel for the parties I am of the opinion that two preliminary issues fall for consideration and which has also been noted in the order of this Court passed on 15.3.2019 which reads under: "(a) Whether or not the reflection of Rs. 42 lacs approximately in the electronic credit ledger of the petitioner is a confirmation of availment or his entitlement for utilization. (b) Whether the petitioner could have been subjected to a proceeding under section 73 of the Bihar Goods and Service Tax Act, 2017 for the entire credit reflecting in the ledger without quantification of the amount which has been either availed or utilized. The facts on record are not in dispute rather what is to be seen is whether, the credit reflected in the electronic credit ledger of the petitioner amounts to either availment or utilization of the credit. Annexures 2 series are a confirmation of the fact that there was an input tax credit to the tune of Rs. 18,33,304.76 in favour of the petitioner for the period 2007-08 and to the tune of Rs. 20,79,256.00 for the period 2011-12 for the taxes deposited under 'the VAT Act' and 'the Entry Tax Act'. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner of State Taxes by placing reliance on Section 142(3) of 'the BGST Act' rejected the claim of transitional BGST credit amounting to Rs. 42,73,869.00 as not being in tune with the prescriptions underlying section 140 of 'the BGST Act' read with Rules 117 of the Rules and consequentially, it is for recovery of the wrongly availed credit that the demand was raised. The issue before us is whether at all the credit was availed by the petitioner, for which the proceeding was initiated. Annexure 7 is the extract of electronic credit ledger showing credit balance in favour of the petitioner and confirms that right since July, 2017 as until November, 2018 there has been no change in situation on the credit balance except for minor shifts here and there. As I have noted, it is the specific argument of Mr. Kejriwal that at no stage any credit has been availed by the petitioner. It is rather contended that the petitioner has regularly deposited his taxes which were found payable. There is nothing on record of the proceedings nor the impugned order anywhere discusses that this credit was ever availed of by the petitioner to meet any tax liability for any particular period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not serve any notice under sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) Where any person chargeable with tax under subsection (1) or sub-section (3) pays the said tax along with interest payable under Section 50 within thirty days of issue of show cause notice, no penalty shall be payable and all proceedings in respect of the said notice shall be deemed to be concluded. (9) The proper officer shall, after considering the representation, if any, made by person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to ten per cent of tax or ten thousand rupees, whichever is higher, due from such person and issue an order. (10) The proper officer shall issue the order under subsection (9) within three years from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 140, specify separately the details of stock held on the appointed day; (c) in the case of a claim under sub-section (5) of Section 140, furnish the following details, namely:- (i) the name of the supplier, serial number and date of issue of the invoice by the supplier or any document on the basis of which credit of input tax was admissibe under the existing law; (ii) the description and value of the goods or services; (iii) the quantity in case of goods and the unit or unit quantity code thereof; (iv) the amount of eligible taxes and duties or, as the case may be, the value added tax or entry tax charged by the supplier in respect of the goods or services; and (v) the date on which the receipt of goods or services is entered in the books of account of the recipient. (3) The amount of credit specified in the application in Form GST TRAN-1 shall be credited to the electronic credit ledger of the applicant maintained in FORM GST PMT-2 on the common portal. (4) (a)(i) A registered person, holding stock of goods which have suffered tax at the first point of their sale in the State and the subsequent sales of which are not subject to tax in the State availing credit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of fraud or willful misstatement or suppression of fact, a similar procedure inviting such action is provided under section 74 of 'the BGST Act'. It is undisputed that it is on the application made by the petitioner under section 140 of 'the BGST Act' that the credit earned got reflected on the electronic credit ledger on 28.8.2017 as admitted by Mr.. Kejriwal showing a credit balance of Rs. 42,73,891.00 as also taken note of in the order impugned. Section 73 makes a dealer liable for proceedings in case of short payment of taxes or erroneously refunded taxes or for wrongly availing or utilizing input tax credit. According to Mr. Vikash Kumar, learned SC11, the reflection on the electronic credit ledger is a confirmation of a wrong availment even if, the said credit was not utilized and which act is liable for proceeding under section 73 of 'the BGST Act'. I have reproduced the relevant provisions of the 'BGST Act' which finds mention in the discussion held for ready reference. The legislative intent present in these provisions is eloquent and I am in no confusion to hold that be it a charge of wrong availment or utilization, each is a positive act and it is only when such ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o error found in the action complained but it would be stretching the term 'availment' beyond prudence to treat the mere reflection of the transitional credit in the electronic credit ledger as an act of availment, for drawing a proceeding under section 73(1) of 'the BGST Act'. The provisions underlying Section 73 is self eloquent and it is only if such availment is for reducing a tax liability that it vests jurisdiction in the assessing authority to recover such tax together with levy of interest and penalty under section 50 but until such time that the statutory authority is able to demonstrate that any tax was recoverable from the petitioner, a reflection in the electronic credit ledger cannot be treated as an 'availment'. The judgment of the Supreme Court rendered in the case of Ind. Swift Laboratories Ltd. (supra) is an expression on situation where such credit has been utilized by a dealer and it is in such circumstances that the Supreme Court bearing note on the adjudication done by Settlement Commission, has recorded its opinion. In so far as the present case is concerned, Annexure 2 series confirms that the petitioner has an input tax credit in his favour under the Value ..... X X X X Extracts X X X X X X X X Extracts X X X X
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