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TMI Blog2024 (7) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... proved by the authority in the month of September, 2017. In such circumstances, the petitioner would never be available to utilize the carried forward of CENVAT credit, which would contrary to the provisions of Section 140 (1) of the CGST Act.' The order dated 07.03.2019 passed by the Commissioner (Appeals), show cause notice dated 02.12.2020 and orders in original for recovery dated 16.02.2021 and 07.03.2019 are hereby quashed and set aside - appeal allowed. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE NIRAL R. MEHTA Appearance: For the Petitioner(s) No. 1 : Mr Anand Nainawati (5970) For the Respondent(s) No. 1 : Advocate Notice Served. For the Respondent(s) No. 2 : Mr PY Divyeshvar (2482). For the Respondent(s) No. 4 : Mr Utkarsh R Sharma (6157). For the Respondent(s) No. 3 : Notice Served By DS. COMMON ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Rule returnable forthwith. Learned advocate Mr. P.Y. Divyeshvar waives service of notice of rule for respondent no. 2 and learned advocate Mr. Utkarsh Sharma waives service of notice of rule for respondent no. 4. 2. Heard learned advocate Mr. Anand Nainawati for the petitioner, learned advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the petitioner, issuing notice to the Department and also granting interim relief to the petitioner, by restraining the Department from initiating any recovery proceedings against the Petitioner in respect of ITC refund already granted to the petitioner. 4.8 On 02.12.2020, demand notice issued to the petitioner, thereby proposing to recover the refunded amount of Rs. 2,58,59,476/- and Rs. 2,78,40,210/- under Section 73 of CGST Act, 2017. 4.9 On 25.01.2021, reply to the demand notice submitted by the Petitioner. 4.10 On 16.02.2021, impugned Order-in-Original passed by the respondent No. 4, confirming the recovery of an amount of Rs. 2,58,59,476/- and Rs. 2,78,40,210/- from the petitioner along, along and Mat with applicable interest and also imposing penalty of Rs. 25,85,948/- and Rs. 2,78,40,210/- for the month of July and August, 2017 on the petitioner under the relevant provisions of Section 73 of CGST Act, 2017. 5. Learned advocates for both the parties submitted that similar petition being Special Civil Application No. 12712 of 2019 is argued before this Court today and therefore, they have adopted the arguments made in Special Civil Application No. 12712 of 2019 by le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempted supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: Provided further that no refund of unutlised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. (4) The application shall be accompanied by - (a) such documentary evidence as may be prescribed to establish that a refunds due to the applicant; and (b) such documentary or other evidence (including the documents referred to in section 33) as the applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to refund claims on account of zero rated supplies shall be filed and processed manually till further orders, which reads as under:- 1.1***** 1.2 ***** 1.3 ***** 2.4 The application for refund of unutilized input tax credit on inputs or input services used in making such zero-rated supplies shall be filed in FORM GST RFD-01A on the common portal and the amount claimed as refund shall get debited in accordance with sub-rule (3) of rule 86 of the CGST Rules from the amount in the electronic credit ledger to the extent of the claim. The common portal shall generate a proof of debit (ARN Acknowledgement Receipt Number) which would be mentioned in the FORM GST RFD-01A submitted manually, along with the print out of FORM GST RFD-01A to the jurisdictional proper officer, and with all necessary documentary evidences as applicable (as per details in statement 3 or 5 of Annexure to FORM GST RFD-01), within the time stipulated for filing of such refund under the CGST Act. 2.5 The registered person needs to file the refund claim with the jurisdictional tax authority to which the taxpayer has been assigned as per the administrative order issued in this regard by the Chief Commissioner of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l amount is to be debited from the other electronic credit ledger (i.e., State tax/Union Territory tax, in this case). 17. The provisions of Goods and Service Tax Act replace the indirect tax regime with effect from 01.07.2017. Central Goods and Service Tax Act 2017 and State Goods and Service Tax Act 2017 and Integrated Goods and Service Tax 2017, were enacted by the legislature which came into effect from 01.07.2017, which intended to subsume all indirect taxes including the Central Excise Act, 1944, the Finance Act, 1994 (Service Tax Act) and Value Added Tax Act. As per the scheme of the GST all the three Acts provide for seamless flow of Input Tax Credit to avoid cascading effect of various taxes. The CGST Act therefore provided the transitional arrangement for carry forward and availment of credit of eligible indirect taxes paid on the Goods Services under the erstwhile regime. In this regard, Section 140 of the CGST Act is therefore enacted for the transition of the various credit of indirect taxes in different Act as under:- i) Closing balance of credit of erstwhile taxes in the last return filed prior to the introduction of GST: ii) Un-availed credit taxes paid on capital g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dger and therefore, obviously there cannot be any balance of such unutilized CENVAT credit which was carried forward as on 01.07.2017. Therefore, in effect there was no unutilized ITC credit lying in the balance in respect of the refunds granted. However, the Commissioner (Appeals) ought to have given the benefit of transitional CENVAT credit carried forward as per GST TRAN-1 filed by the petitioner and approved by the authority in the month of September, 2017 as if such credit was available as on 01.07.2017 as an opening balance in the electronic credit ledger. Reliance placed by the Commissioner (Appeals) on Circular No. 59/33/2018-GST dated 04.09.2018 to the effect that the balance in the electronic ledger of the claimant on the end of the tax period for which, the refund claim is being filed after the return for the said period has been field literally interpreted so far as the first two months of GST regime i.e. July, 2017 and August, 2017, for which there is a provision of Section 140 (1) would have direct impact and therefore, the Commissioner (Appeals) committed an error by in relying upon Circular No. 59 dated 04.09.2018, which would not be applicable in the facts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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