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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 ..... facts which emerge. 2. The petitioner is principally aggrieved by the order dated 05 July 2023 and which has essentially placed in abeyance the Refund Sanction Order dated 09 December 2022. The Refund Sanction Order undisputedly pertained to the amounts standing to the credit of the Electronic Cash Ledger of the writ petitioner. 3. Undoubtedly, the said ledger would embody amounts which have been deducted under Section 51 of the Central Goods and Services Tax Act, 2017 by a department or establishment of the government, a local authority, or other governmental agencies. In this case, these were amounts which were deducted by the Delhi Metro Rail Corporation and credited to the Electronic Cash Ledger of the deductee, namely, the petitioner herein. 4. We also take note of the provisions contained in Section 49 (5) of the Act and which 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et contended that Section 108 confers a power on the revisional authority to stay the operation of a decision or order made under the CGST Act in the interregnum and till it concludes an inquiry with respect to the validity of the said decision or order. In view of the aforesaid, it was contended that there exists no justification for the Court to interdict those proceedings initiated by the revisional authority at this stage and where only an interim stay had been granted and all rights and contentions of the writ petitioner stand preserved. 6. Taking us through the provisions enshrined in Sections 49, 51 and 54 of the CGST Act, Mr. Singla submitted that the power to restrain implementation of an order of refund would apply equally to sums standing to the credit of either the Electronic Credit or the Electronic Cash Ledger. Mr. Singla laid emphasis on Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of integrated tax; (c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax: [Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;] (d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax: [Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;] (e) the central tax shall not be utilised towards payment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] [(12) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, subject to such conditions and restrictions, specify such maximum proportion of output tax liability under this Act or under the Integrated Goods and Services Tax Act, 2017 (13 of 2017) which may be discharged through the electronic credit ledger by a registered person or a class of registered persons, as may be prescribed.] xxxx xxxx xxxx 51. Tax deduction at source.-(1) Notwithstanding anything to the contrary contained in this Act, the Government may mandate,- (a) a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) such persons or category of persons as may be notified by the Government on the recommendations of the Council, (hereafter in this section referred to as "the deductor"), to deduct tax at the rate of one per cent. 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries or any other person or class of persons, as notified under Section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of [two years] from the last day of the quarter in which such supply was received. (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than- (i) zero rated supplies 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 exempt supplies), except supplies of goods or services or both as may be notified 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zero-rated supplies; (b) refund of unutilised input tax credit under sub-section (3); (c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued; (d) refund of tax in pursuance of Section 77; (e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or (f) the tax or interest borne by such other class of applicants as the Government may, on the recommendations of the Council, by notification, specify. [(8-A) The Government may disburse the refund of the State tax in such manner as may be prescribed.] (9) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provisions of this Act or the rules made thereunder or in any other law for the time being in force, no refund shall be made except in accordance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is section,- (1) "refund" includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3). (2) "relevant date" means- (a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,- (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or (ii) if the goods are exported by land, the date on which such goods pass the frontier; or (iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India; (b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished; [(ba) in case of zero-rated supply of goods or services or both to a Special Economic Z ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered person claiming refund of sums standing in balance in the Electronic Cash Ledger would have to follow the procedure as prescribed. Of crucial significance is the usage of the phrase "in accordance with the provisions of sub-section (6) of Section 49" as they appear in Section 54 (1). Thus refund, be it from the Electronic Cash or the Electronic Credit Ledger, are essentially treated at par. By virtue of Section 54 (11), the Commissioner stands independently empowered to withhold a refund if it be of the opinion that the grant thereof would adversely affect the Revenue either in an appeal which may be pending or in any other proceedings on account of malfeasance of fraud that may have been committed. 11. Undisputedly, there is no outstanding demand against the petitioner and which may have perhaps legitimately constituted one of the possible reasons to withhold the refund. While it is true that Section 54 while making specific provisions with respect to refund of unutilized ITC in terms of sub-sections (5) and (8) thereof, stops short of incorporating similar restrictions on utilization of the balance standing in the Electronic Cash Ledger in terms which may be described as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ass such order, as he thinks just and proper, including enhancing or modifying or annulling the said decision or order. (2) The Revisional Authority shall not exercise any power under sub-section (1), if- (a) the order has been subject to an appeal under Section 107 or Section 112 or Section 117 or Section 118; or (b) the period specified under sub-section (2) of Section 107 has not yet expired or more than three years have expired after the passing of the decision or order sought to be revised; or (c) the order has already been taken for revision under this section at an earlier stage; or (d) the order has been passed in exercise of the powers under sub-section (1): Provided that the Revisional Authority may pass an order under sub-section (1) on any point which has not been raised and decided in an appeal referred to in clause (a) of sub-section (2), before the expiry of a period of one year from the date of the order in such appeal or before the expiry of a period of three years referred to in clause (b) of that sub-section, whichever is later. (3) Every order passed in revision under sub-section (1) shall, subject to the provisions of Section 113 or Section 117 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t taken into account certain material facts which were not available at the time of issuance of the said order as detailed herein below: (i) As per the data available, the taxable value of Inward Supplies is Rs 348 crores from the date of registration in Feb 2020 to September 2022, which is not supported by the bank statements of the taxpayer. (ii) Balance Sheet for the F.Y. 2020-21 shows that the taxpayer had capitalized a vehicle amounting to Rs. 16 crores which leads to infer that ITC has been availed on this item. Since the party was engaged in construction activity, as per section 17 of the CGST Act, the ITC is inadmissible on vehicles. (iii) Further, from the scrutiny of GSTR-2A and the Bank Statement, it is seen that 75% of the supplies were made by the following three suppliers (a) M/s VCCL, (b) M/s Terratec India Pvt. Ltd. and (c) LR Sharma. Further, it has come to the notice that till July 2022, only the aforementioned three major parties have issued invoices amounting to Rs. 132 Crore to HCC-VCCL(JV), whereas the bank statement shows that the payment against these invoices have been made to the extent of Rs. 16.25 crores only within the stipulated time of 180 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,- (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; [(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;] (b) he has received the goods or services or both. [Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered pereon;] [(ba) the details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the aforesaid conclusions as appearing in the order impugned, 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. 18. That issue, in our opinion, must necessarily be answered in the negative. The pre-requisite condition for invocation of Section 108 is the formation of an opinion that an order made under the CGST Act is erroneous, prejudicial to the interest of the Revenue, illegal or improper. By virtue of Section 108 the Commissioner is also empowered to invoke its revisional authority in a situation where it comes to the conclusion that the order under scrutiny was made without taking into account certain material facts whether available at the time of making of that order or not as well as in consequence of an observation rendered by the Comptroller and Auditor General of India. 19. Admittedly, the allegation of wrongful availment of ITC is based on intelligence inputs received ..... X X X X Extracts X X X X X X X X Extracts X X X X
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