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TMI Blog2021 (11) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... e CGST Act is not paid by the petitioner by himself and therefore, it is not entitled to claim refund of the same, is totally misplaced. As the petitioner is claiming refund balance in electronic cash ledger, it is covered by the proviso to sub-section (1) of Section 54 and would not fall under sub-section (1) of Section 54. Maintainability of the writ petition - HELD THAT:- Though an effective remedy of appeal to the Appellate Tribunal is provided under Section 109 of the CGST Act, it is an admitted fact that the said Tribunal has not yet been constituted, though more than 3 years have elapsed after the CGST Act has been introduced. Thus, the petitioner cannot be compelled to wait for eternity to agitate its claim seeking refund of the amount to which it is entitled to under the statute and also blocking its funds affecting its cash flows, merely because of existence of (non functional) alternate forum/remedy on paper, by not invoking the jurisdiction under Article 226 of the Constitution of India. Further, mere existence of alternative remedy is no bar for invoking the jurisdiction under Article 226 of the Constitution of India, when right to carry on business is being imped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of Section 52 of the CGST Act as Collection of tax at source ; and that the such deposit of amount made by the ECO with the Government is allowed to be claimed as credit by the petitioner in the electronic cash ledger of the petitioner, on the basis of the statement filed by ECO in Form GSTR-8 in terms of Rule 67 of the Central Goods and Services Tax Rules, 2017 (for short, the CGST Rules ). 5. The petitioner also contends that due to maintenance of huge inventory on account of purchases affected to meet the forecasted demand, the petitioner invariably has excess balance of ITC in its electronic credit ledger, which is utilized for discharge of GST liability, as and when sale of goods is effected through ECO, and therefore, the amount retained by the ECO and deposited with the Government under Section 52 of the CGST Act, as tax collected at source and reflected in petitioner s electronic cash ledger remains unutilized; that the said unutilized balance in the petitioner s electronic cash ledger can be claimed as refund in terms of Section 49(6) read with Section 54 of the CGST Act; and that the said balance amount in the electronic cash ledger is being refunded to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner and it is entitled to claim refund of the same under the category of refund of excess balance of electronic cash ledger . 10. The petitioner also contends that the CBIC, vide Circular No.125/44/2019/GST, dt.18.11.2019, has clarified that refund of excess balance in electronic cash ledger arising on account of TCS can be claimed under the category of refund of excess balance in electronic cash ledger and that a CA certificate was also furnished in terms of Rule 89(2)(n) of the CGST Rules, in support of the fact that incidence of amount paid and claimed as refund, i.e. TCS, credited to electronic cash ledger, has not been passed to any other person. 11. The petitioner further contends that the 4th respondent, after granting personal hearing on 23.10.2020 passed the impugned Order-in-Appeal setting aside the refund sanction order dt.18.09.2019 and rejected the refund claim. 12. The 4th respondent, by the impugned Order-in-Appeal, has held that there is no provision under Section 54(1) for refund of TCS under deposited Section 52 of the CGST Act; that the Circular dt.18.11.2019 allows refund of TCS TDS, only when the same has been erroneously deposited in excess, und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution of India. 17. The respondents also contend that the amount deducted by the ECO from the consideration payable to the supplier under Section 52 of the CGST Act and deposited with the Central Government is not a tax or that it is the liability of the petitioner; thus, the TCS is not an amount which is paid by the assessee and the refund thereof in terms of Section 54(1) of the CGST Act or proviso thereto is not provided; and that the amount deposited by the ECO with the Government is to be utilized only for payment of tax by the supplier for his outward supplies, and Section 52 of the CGST Act does not envisage refund of such amount. 18. The respondents would contend that the answer provided to Question No.24 of FAQs also specifies that the refund is to be in accordance with the provisions of Section 54(1) of the CGST Act, which applies only to the amount paid by a claimant into the electronic cash ledger, but not the amount which has been deducted and deposited by ECO, and therefore, the clarification in the form of answer to Question No.24 of FAQs is not applicable to the petitioner. 19. The respondents also seek to rely on the extension of limitation granted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other amount using any of the mode of payment stands credited to the electronic cash ledger of such person to be maintained. In order to make deposit towards any of the amount specified, the Section 49(1) of the CGST Act does not mandate such payment to be made only by the person in whose name such electronic ledger is maintained. On the other hand, Section 49 allows a person to deposit the sums into the electronic cash ledger of another person, subject to such conditions and restrictions as may be prescribed. 29. Thus, a reading of Section 49(1) of the CGST Act would indicate that it is not only the person in whose name the electronic cash ledger is maintained, but also other person can make deposits into the electronic cash ledger. This would be evident from the language used in Section 49(1), as while allowing deposit, reference is made to by a person , and while giving credit to the electronic cash ledger, the word used is such person . If the intent of the section is to allow the deposit only by the person in whose name the Electronic Cash Ledger is maintained, the same could have been mentioned by using the words like of the said person or by stating his elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 33. In the counter affidavit filed the respondents have taken a stand that the collection of amount by the ECO from the net value of taxable supplies under Section 52(1) is not a tax , as what is specified is the deduction of amount and deposit with the government. However, we cannot lose sight of the fact that the collection so permitted under Section 52 is specified in Chapter X dealing with Payment of Tax and the heading of Section 52 also deals with Collection of tax at source . Further, it is also to be noted that Section 9 of the CGST Act is the charging section providing for levy and collection of tax called as central goods and services tax . If the contention of the respondents that the said amount collected under Section 52 is not a tax , then such collection would have to be treated as without authority of law, if the same does not partake the character of tax , which is only permitted to be levied and collected by the charging Section i.e. Section 9 of the CGST Act. 34. Further, it is also to be noted that the said submission of the respondents is without taking note of the Chapter and the Section under which it is collected where such collection is def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest, if any, paid on such tax, or any other amount or paid by him . It merely refers to a registered person claiming refund of balance in Electronic Cash Ledger and nothing more. Thus, the refund under the proviso can be claimed (i) only by a registered person as defined under Section 2(94) of the CGST Act, (ii) of the balance in the electronic cash ledger. 41. Therefore, the Section 54(1) covers two different classes of persons who can claim refund namely i) any person and ii) registered person . Similarly it also covers two different types of refunds namely i) tax, interest of any other amount and ii) balance in electronic cash ledger. 42. The petitioner is covered by class of person specified in (ii) and the refund claimed is also under (ii) type of refund specified above. 43. The balance amount in the electronic cash ledger till it is appropriated by making payment towards discharge of liability of tax, interest or any other amount to the Government, would be the amount available to the registered person in whose name the said electronic cash ledger is maintained. Therefore, the stand of the respondents that since the amount collected by ECO under Section 52 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stand of the 4th respondent that the said clarification provided by the CBIC does not bind the said authority discharging quasi-judicial functions under the CGST Act. 47. Before accepting the said plea urged, it is to be seen that the impugned order came to be passed on an appeal filed by the 5th respondent on the basis of the authorization issued by the 3rd respondent. It is not disputed that the circular/clarification/instructions issued by the CBIC in exercise of powers under Section 168 of the CGST Act, binds the 3rd respondent. Thus, if the clarification issued by CBIC binds the 3rd respondent, the same ought to have been followed while examining the correctness of the refund sanction order and before issuing authorization to file appeal thereagainst. 48. Though the 4th respondent has taken a stand that clarification issued by the CBIC does not bind the said authority, being an appellate authority, he ignored the fact that he is otherwise duty bound to examine the correctness or otherwise of the grounds in the appeal filed including the authorization issued by the 3rd respondent for filing the said appeal, contrary to the clarification issued by the CBIC. 49. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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