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TMI Blog2024 (11) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... alance standing in the Electronic Cash Ledger in terms which may be described as explicit, the position, would be no different. Section 108 empowers the revisional authority to place in abeyance any order made under the CGST Act and which in its opinion could be said to be illegal, improper or prejudicial to the interest of the Revenue - the contention of the petitioner cannot be sustained, who had sought to canvass a position of distinction which should be recognised to exist and governing sums which stand in balance in the Electronic Cash and Electronic Credit Ledgers. The revisional authority appears to have doubted the ITC which was claimed by the writ petitioner in the tax period in question. While that conclusion and tentative view as expressed would be open to be tested under the CGST Act, the question which merits consideration is whether that conclusion would have justified the invocation of Section 108. Admittedly, the allegation of wrongful availment of ITC is based on intelligence inputs received subsequent to the passing of the order dated 09 December 2022. The allegation of improper utilization of ITC is one which is clearly distinct and unconnected with the order san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich prescribe the manner in which the Input Tax Credit available in the Electronic Credit Ledger of a registered person could be utilized. Of equal significance is sub-section (6) of Section 49 which provides that the balance in the Electronic Cash or Credit Ledger may be refunded in accordance with Section 54 after payment of tax, interest, penalty, fee or any other amount payable under the Act. 5. As per the facts which emerge from the record, presently there does not appear to be any quantified demand or liability that stands created against the writ petitioner. As we peruse the impugned order, we find that the principal allegation against the petitioner is of an incorrect utilization of ITC alone. 6. We further take note of the provisions made in Section 54 and which while addressing various contingencies in which a refund of unutilized ITC may be stalled or paused, incorporates no corresponding prohibitions with respect to amounts standing to the credit of the Electronic Cash Ledger. 7. In order to enable Mr. Singla, learned counsel appearing for the respondents to address submissions in the aforesaid light, let the matter be called again on 05.11.2024. 3. The submission which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 49 (3) in terms of which the statute provides that the amount available in the Electronic Cash Ledger may be used for making payments towards tax, interest, penalty, fee or any other amount payable under the CGST Act, and thus, standing on an equal pedestal with amounts which may stand in the balance of an Electronic Credit Ledger. This, according to Mr. Singla, would be the position which would indisputably emerge when one reads sub-sections (2) and (3) of Section 49. 7. The fact that the CGST Act places sums standing to the credit of those ledgers on an equal pedestal, according to Mr. Singla, is further fortified from a reading of Section 49 (6) and which prescribes that the balance in both those ledgers may be refunded in accordance with the provisions of Section 54. 8. For the purposes of evaluating the submissions which were addressed, we deem it apposite to extract Sections 49, 51 and 54 hereunder: 49. Payment of tax, interest, penalty and other amounts. ( 1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of State tax or Union territory tax; and (f) the State tax or Union territory tax shall not be utilised towards payment of central tax. (6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of Section 54. (7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed. (8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely: (a) self-assessed tax, and other dues related to returns of previous tax periods; (b) self-assessed tax, and other dues related to the return of the current tax period; (c) any other amount payable under this Act or the rules made thereunder including the demand determined under Section 73 or Section 74 [or Section 74-A]. (9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the payment made or credited to the supplier (hereafter in this section referred to as the deductee ) of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees: Provided that no deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient. Explanation . For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the central tax, State tax, Union territory tax, integrated tax and cess indicated in the invoice. (2) The amount deducted as tax under this section shall be paid to the Government by the deductor within ten days after the end of the month in which such deduction is made, in such manner as may be prescribed. [(3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed.] (4) [* * *] (5) The deductee shall claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor furnished under sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Government on the recommendations of the Council: [* * *] 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 refund is 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 interest had not been passed on to any other person: Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration, based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person. (5) If, on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with the provisions of sub-section (8). (10) Where any refund is due [* * *] to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper officer may (a) withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be; (b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law. Explanation . For the purposes of this sub-section, the expression specified date shall mean the last date for filing an appeal under this Act. (11) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to such deemed exports is furnished; [(ba) in case of zero-rated supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit where a refund of tax paid is available in respect of such supplies themselves, or as the case may be, the inputs or input services used in such supplies, the due date for furnishing of return under section 39 in respect of such supplies;] (c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of (i) receipt of payment in convertible foreign exchange [or in Indian rupees wherever permitted by the Reserve Bank of India], where the supply of services had been completed prior to the receipt of such payment; or (ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice; (d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on utilization of the balance standing in the Electronic Cash Ledger in terms which may be described as explicit, the position, in our considered opinion, would be no different. 12. This we note since Section 108 empowers the revisional authority to place in abeyance any order made under the CGST Act and which in its opinion could be said to be illegal, improper or prejudicial to the interest of the Revenue. 13. We, therefore, find ourselves unable to sustain the contention of the petitioner who had sought to canvass a position of distinction which we should recognise to exist and governing sums which stand in balance in the Electronic Cash and Electronic Credit Ledgers. 14. However, and notwithstanding the above, we find merit and force in the second submission which was addressed in challenge to the impugned order and which proceeded on the following lines. Taking us through the order impugned, learned counsel for the writ petitioner, laid emphasis on a complete absence of any finding which may have been indicative of the revisional authority having come to even a prima facie conclusion that the order dated 09 December 2022 was either illegal, improper or prejudicial to the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (1) shall, subject to the provisions of Section 113 or Section 117 or Section 118, be final and binding on the parties. (4) If the said decision or order involves an issue on which the Appellate Tribunal or the High Court has given its decision in some other proceedings and an appeal to the High Court or the Supreme Court against such decision of the Appellate Tribunal or the High Court is pending, the period spent between the date of the decision of the Appellate Tribunal and the date of the decision of the High Court or the date of the decision of the High Court and the date of the decision of the Supreme Court shall be excluded in computing the period of limitation referred to in clause (b) of sub-section (2) where proceedings for revision have been initiated by way of issue of a notice under this section. (5) Where the issuance of an order under sub-section (1) is stayed by the order of a court or Appellate Tribunal, the period of such stay shall be excluded in computing the period of limitation referred to in clause (b) of sub-section (2). (6) For the purposes of this section, the term, (i) record shall include all records relating to any proceedings under this Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Rule 37 of CGST Rules, 2017. xxxx xxxx xxxx 13. I have carefully gone through all the material facts provided by the taxpayer and the contentions of the taxpayer is summarized below:- (i) The payment of invoices issued by VCCL, Terratec India Pvt. Ltd. and LR Sharma Co. has been partially paid by the Joint Venture. The taxpayer has provided partial bank statements and ledgers for the same. (ii) Any inquiry or investigation can continue and may take it own course, but these proceedings cannot have any bearing on this ECL refund. In other words, no provision under GST restricts the refund of ECL unless there is an outstanding demand of tax. (iii) In F.Y. 2020-21 the Tunnel Boring Machine (TBM) amounting to Rs. 16.56 crores approximately have been mentioned as vehicle instead of Plant Machinery . Such a mistake of presentation in the Financials is an error only in FY 2020-21 due to change in the Statutory Auditor. This mistake was rectified by the same Auditor in the Financials of the subsequent year i.e. FY 2021-22. But this error may not change the nature and purpose of TBM. 13.1 For taxpayer contention mentioned at sub para (i) above: The taxpayer has claimed ITC on all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d person under section 38 has not been restricted;] (c) subject to the provisions of 4[section 41 5[***]], the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: The relevant portion of Rule 37 of CGST Rules, 2017 is reproduced below: Rule 37. Reversal of input tax credit in the case of non-payment of consideration.- [(1) A registered person, who has availed of input tax credit on any inward supply of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, but fails to pay to the supplier thereof, the amount towards the value of such supply [whether wholly or partly,] along with the tax payable thereon, within the time limit specified in the second proviso to sub-section (2) of section 16, shall pay [or reverse] an amount equal to the input tax credit availed in respect of such supply [proportionate to the amount not paid to the supplier,] along with interest payable thereon under section 50, while furnishing the return in FORM GSTR-3B for the tax period imme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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