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TMI Blog2022 (3) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 140 has been made, where, as has been quoted herein above, the registered person is entitled to take Cenvat credit in his electronic credit ledger carried forward in the return relating to the period ending with the day immediately preceding the appointed day. Though there was a balance in the credit insofar as the petitioners' case is concerned, as on 30.06.2017, for which the petitioners respectively made applications invoking Section 140(1) of the Act and such a credit has been carried forward under that Section. However, insofar the present claim made in these three cases are concerned, these credits were not available as on 30.06.2017, because, admittedly, these payments had been made only in the respective dates mentioned above in December 2017 and May 2018 - Once that payment has been made after the cut off date for making TRAN-1 application whether those amount/credit can be sought for to carry forward to the GST regime by making an application once again under Section 140(1) is the question. Merely because, the transitional provision has come into effect from 01.07.2017 and under Section 140(1) of the Act, the persons like the petitioners can make a cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel (in WP.No.1160 of 2019) COMMON ORDER Since the issue raised in these writ petitions is common, with the consent of the learned counsel appearing for the parties, all these writ petitions were heard together and are being disposed of by this common order. 2. For the sake of convenience, the facts mentioned in W.P.No.1092 of 2019 is taken up and traversed. 3. The petitioner is engaged in providing various construction services to Government/Private parties and was registered with the erstwhile Service Tax Department. From 01.07.2017 as the GST regime has come into effect, the petitioner has shifted to GST regime from that date. The petitioner had filed last service tax return in the erstwhile regime for the quarter from April to June 2017 by 15.08.2017. 4. During the course of audit of accounts conducted by CERA Audit party for the erstwhile regime, it was pointed out that, the petitioner is liable to pay service tax under reverse charge on services rendered at two quarries, for which, royalty had been paid by the petitioner to the Government of Tamil Nadu for mining stones since such royalty payments are liable to service tax consequent to the issuance of N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the time since there has been change to GST regime and that has come into effect from 01.07.2017, whereby, the transitional provision has been made as stated, the petitioner could not make any application under GST TRAN-1 seeking for transfer of credit to the electronic credit ledger under the GST regime. 8. This is the peculiar situation faced by the petitioner as he paid the service tax only on 30.12.2017. In order to get the refund of the said amount, because, the said service tax paid is purely an input tax, for which, credit can be taken by the petitioner under erstwhile Cenvat Credit Rules, he had made an application, of course within the time limit to the respondent/Revenue. However, the said application seeking for refund filed by the petitioner, having been considered, was rejected through the Order-in-Original No.19/2018 dated 24.09.2018. 9. In the said order, though the respondent has found that, the assesee is eligible for taking Cenvat credit of the amount so paid under Service Tax Rules, since there was no provision in the new regime to allow as input tax credit in GST/credit in Electronic cash ledger/payment in cash and in the absence of any specific provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the petitioners in these cases on 14.12.2017, 30.12.2017 and 02.05.2018 respectively. Except in W.P.No.1160 of 2019, where, the CVD and SAD i.e., Countervailing Duty and Special Additional Duty had been paid by the said petitioner on 14.12.2017, in other two cases, the very payment itself made beyond 27.12.2017. Even in respect of W.P.No.1160 of 2019, those payments since had been made only on 14.12.2017 within the span of 10 to 15 days, the petitioner could not make an application in GST TRAN-1 under Section 140(1) of the Act. 12. In order to meet these kind of situation, according to the learned counsel for the petitioners, there is a provision available under Section 142 of the Act, which is also a transitional provision under the heading Miscellaneous transitional provisions . Sub-section (3) of Section 142 enables any person to file a refund claim either before, on or after the appointed day i.e., 01.07.2017. For refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, such claim shall be disposed of in accordance with the provisions of existing law and any amount accruing to him shall be paid in cash. 13. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication in GST TRAN-1 under Section 140(1) of the GST Act could not have been possible for the petitioners in view of the peculiar circumstances. 18. Therefore, this kind of applications submitted by the petitioners or persons like the petitioners seeking for the refund under Section 142(3) should have been dealt with and disposed of in the manner provided in that sub-section and if the respondent decided the application in that manner, certainly, the present reason given in the impugned order might not have been given and the claim of the petitioners if not for refund atleast for transfer in the credit or taking the credit in the present GST account could have been acceded to. 19. Therefore, the learned counsel appearing for the petitioners makes a request that, the impugned order, since has given the only reason that, for want of provisions, the refund claim made by the petitioners is rejected and such a provision is available in the Act and it would be possible for the respondent to take the route of Section 142(3), the order impugned can be interfered with and set aside and it can be remanded back to the respondents for reconsideration to take up the application submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or claimant like the petitioners and that is related to Central Excise Act, 1944. Therefore, what was the eligibility of a person under Central Excise Act, 1944 to seek for a refund claim, such kind of refund claim alone should be made under sub-section (3) of Section 142 and therefore, the application submitted by the petitioners to take a credit and to transfer the same, cannot be treated as a refund application within the meaning of Section 142(3) of the Act, they contended. (v) They also made submission that, insofar as the eligibility of the petitioners to seek CENVAT credit under Rule 3 of the Cenvat Credit Rules, the conditions imposed under Rule 4 of the Cenvat Credit Rules should have been fulfilled. (vi) One such condition is, as per third proviso to Rule 4(1) of the Cenvat Credit Rules, that the manufacturer or the provider of output service shall not take CENVAT credit after one year of the date of issue of any of the documents specified in sub-rule (1) of Rule 9. (vii) Quoting this provision of the Cenvat Credit Rules, the learned Standing Counsel for the respondents would further contend that, the one year limitation which starts from the documents per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in the electronic credit ledger of the petitioners under the GST regime. Such a stand taken by the petitioners at this juncture cannot be countenanced, therefore, on that ground also, the petitioners are not entitled to seek any quashment of the impugned order and a consequential relief of remand or otherwise, therefore, the learned Standing Counsels would contend that, all these writ petitions are liable to be rejected. 21. I have considered the detailed submissions made by the learned counsel for both sides and have perused the materials placed before this Court. 22. Insofar as the dates with regard to the payment of service tax or the duty in the three cases are concerned, there is no dispute. In all the three cases, before 30.06.2017 i.e., during the erstwhile Central Excise, Service Tax and Cenvat Credit regime, the amounts had not been paid. In W.P.No.1092 of 2019, service tax was paid on 30.12.2017 for a sum of ₹ 26,88,460/-, in W.P.No.528 of 2019 service tax had been paid by this petitioner on 02.05.2018 for a sum of ₹ 24,20,684/-, in the third case i.e., W.P.No.1160 of 2019, the petitioner had paid the Countervailing Duty as well as Special Additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s mentioned above in December 2017 and May 2018. 25. Once that payment has been made after the cut off date for making TRAN-1 application whether those amount/credit can be sought for to carry forward to the GST regime by making an application once again under Section 140(1) is the question. 26. Insofar as the said option is concerned, as has been rightly pointed out by the learned counsel appearing for the petitioners, that kind of application under Section 140(1) cannot be made in these cases, because, the condition imposed under Section 140(1) is that, the registered person opting to pay tax shall be entitled to eligible duties carried forward in the return relating to the period ending with the day immediately preceding the appointed day. 27. So, what was the eligible credit available in the account as on 30.06.2017 alone should be carried forward under Section 140(1) transitional provision. 28. Here these amounts since have been paid as stated supra, sometime after the time limit for making the application under Section 140(1), these amounts whether can be sought for by way of credit transfer or refund in cash, is the next question. 29. In this context, it is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nic credit ledger under the GST regime. 34. In this context, a further objection was raised by the Revenue side that, even according to sub-section (3) of Section 142, the petitioners would be eligible to be considered for the refund claim, provided, if they are eligible to seek such refund under erstwhile regime. Here in the case in hand, it is only a Cenvat credit, even for the Cenvat credit, whether they are eligible to seek for such a credit prior to 30.06.2017 is also a question, where, factually such Cenvat credit for these amounts could not have been claimed, as admittedly these amounts have been paid subsequent to 30.06.2017. Even if the application submitted by the petitioners is considered under Section 142(3), even then the petitioners would not be eligible to claim such Cenvat credit much less the refund claim. 35. In support of this objection, the learned Standing Counsel appearing for the Revenue drew the attention of this Court to third proviso to Rule 4(1) of Cenvat Credit Rules which says that, the manufacturer or provider of output service shall not take Cenvat credit after one year of the date of issue of any of the documents specified in sub-rule (1) of Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds thus: 12. In the self assessment era, it is for the assessee to assess the liability correctly and pay appropriate service tax, which the claimant has not properly done. Had the claimant paid the applicable service tax at the appropriate time they could have very well taken the credit and carried over the same, when GST came into force. I find that though the assessee is eligible for taking cenvat credit of the amount so paid under Service Tax Rules, there is no provision in the new regime to allow such refund as input tax credit in GST/credit in Electronic cash ledger/payment in cash. In the absence of such provisions, I am inclined to reject the refund claim as not tenable. (Emphasis supplied) 39. Thus, the eligibility of the petitioners otherwise to claim the Cenvat Credit under normal circumstances under the erstwhile law prior to 30.06.2017 is not in much dispute. However, it is the vehement contention on the part of the Revenue that, what are all the eligible credit for which, credit can be taken by the petitioners during the transitional period was taken by the petitioners as on 30.06.2017, thereafter the subsequent payment made shall not form part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the issue has to be referred to and disposed and decided by such forum. Earlier the view was that, it would apply only to judicial matters but in Mohapatra and Company and another Vs. State of Orissa and another [1985] 1 SCR 322, it was held that the doctrine of necessity applies not only to judicial matters but also to quasi-judicial and administrative matters . 44. The Doctrine of Necessity though would be applied only with regard to the forum or the authority by whom it shall be decided, here, since it is a transitional period from the erstwhile tax regime to the present GST regime, where, the available provisions are to be best utilised by the taxpayers, it become imperative in order to meet the special situation as the one discussed above, to have a forum, for which, the available legal provision of the Act viz., GST Act, 2017 can very well be invoked. The Doctrine of Necessity has been best explained in ( 1996) 4 SCC 104, Election Commission of India and another Vs. Dr.Subramaniam Swamy and another and also in (2006) 3 SCC 276 in State of U.P. Vs. Sheo Shanker Lal Srivastava and others. In a Division Bench judgment of High Court of Delhi in the matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are liable to be set aside, accordingly are set aside. As a sequel, the matters are remitted back to the respondents for reconsideration. While reconsidering the same, the authority concerned, who has to deal with the applications of the petitioners, shall consider and dispose of these applications under Section 142(3) of the CGST Act, 2017. (ii) While reconsidering the said applications, the claim made by the petitioners need not be considered for the purpose of refund of the claim made by them. However, the said claim made by the petitioners can very well be considered for the purpose of permitting the petitioners to carry forward the accrued credit to the electronic credit ledger of the GST regime. (iii) After considering the said applications, as indicated above, the necessary order shall be passed by the respondents within a period of six weeks from the date of receipt of a copy of this order. It is made clear that, before passing the orders as indicated above, an opportunity of being heard shall be given to the petitioners, so that the petitioners can put forth their case by providing all necessary inputs to the satisfaction of the authorities to take a decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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