9911796707
TMI Blog2024 (1) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... o issue a Writ of Certiorari, or a Writ in the nature of Certiorari, or any other appropriate Writ, Order or direction, calling for the papers and proceedings leading to the Order-in-Appeal Nos. AHM-EXCUS- 002-APP-210&211-18-19 dated 22.03.2019 passed by the Commissioner (Appeals) of Central Good and Service Tax, Ahmedabad(Annexure L) and Order dated 28.05.2019 passed in the application for Rectification of Mistake (ROM) (Annexure N) and after looking into the same and the legality thereof, this Hon'ble Court be pleased to quash and set aside the said Order dated 22.03.2019 and 28.05.2019; (aa) that this Hon'ble Court be pleased to issue a Writ of Certiorari or a writ in the nature of certiorari or any other appropriate Writ, order or directions calling for papers and proceedings leading to Order-in-Original No. 45/JC/MT/GST/2020-21 dated 18.02.2021 (Annexure-0) passed by the Respondent No. 4 of Central Goods and Service Tax, Ahmedabad and after looking to the same and legality thereof the Hon'ble Court may be pleased to quash and set aside the said order dated 18.02.2021 (Annexure-O). (b) that this Hon'ble Court be pleased to issue a Writ of Prohibition, or a W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 2017 through ARN Receipts. 5.3. At the relevant time, there was difficulty in filing all the documents/evidences for refund claim in electronic common portal and therefore, the Petitioner submitted necessary documents in the prescribed Form viz. GST RFD-01A to respondent No. 3in terms of Circular No. 17.17.2017 GST dated 15.11.2017. As per Rule 89 of the CGST Rules, the Petitioner computed the following 3 amounts for considering eligible amount of refund of unutilized amount of ITC of input and input service used in manufacture of zero rated supplies: (i) Computation of refund as per statement 3A i.e. unutilized amount of "Net ITC" proportionate to zero rated supply of adjusted turnover; (ii) Balance lying in the Electronic Credit Ledger of the Petitioner at the end of the period for which the refund claimed was filed; (iii) Balance in electronic credit ledger at the time of filing refund claim. 5.4 Accordingly, the petitioner computed eligible amount of refund claim under each of the head for the months of July 2017 and August 2017, which are as under:- July, 2017 Value as per Statement 3A Balance in Electronic Credit Ledger Tax Credit availed during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .8. Respondent No. 3 preferred the appeals challenging the Refund Order Nos. 02/Final/2017-18 dated 28.03.2018 and 05/Final/2017-18 dated 20.04.2018 before the Ld. Commissioner (Appeals) of CGST and Central Excise. The Revenue inter alia contended that the Petitioner was eligible for refund of unutilized amount of ITC of input and input service lying in Electronic Credit Ledger. Since the Petitioner utilized the entire amount of IGST, CGST and SGST against liability of tax on outward supply, there was no balance lying in Electronic Credit Ledger and therefore, respondent No. 3 wrongly sanctioned the refund claims. 5.9. The petitioner vide letter dated 11.01.2019 filed rejoinder/written submission to the appeal. The petitioner inter alia contended that when the refund amount was calculated as per the formula given in the Statement 3A, the system automatically computed eligible amount of refund considering the value as per the statement 3A. It was inter alia contended that there was no specific column of unutilized credit in GST RFD 01A. The petitioner contended that the Circular No. 59/33/2018 dated 04.09.2018 was issued after filing and sanctioning the refund claim for the month o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-show cause notice was culminated into issuance of the protective show cause notice, whereby the Additional Commissioner of CGST Ahmedabad North, proposed to recovery of erroneously alleged amount of refund sanctioned to the Petitioner. 5.15. The Joint Commissioner of CGST Ahmedabad North vide Order in- Original No. 45/JC/MT/GST/2020-21 dated 18.02.2021 confirmed and ordered for recovery of erroneously refunded amount under Section 73 of the CGST Act, 2017 along with interest. The respondent imposed penalty as envisaged under Section 73(9). The request made by the Authorized representative of the Petitioner to keep the protective Show Cause Notice in abeyance since the matter was sub judice before this Court, was not accepted on the premise that Section 73(10) of the CGST Act provided specific time limit for adjudication of the Show Cause Notice. As per Section 73(10) the Show Cause Notice was required to be adjudicated within 3 years from due date of furnishing annual return for the financial year for which the refund was erroneously sanctioned. In the present case, refund was sanctioned on 28.03.2018 and therefore, the order was required to be passed on or before 27.03.2021. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with interest by the impugned order dated 22.03.2019. It was further submitted that the impugned order passed by the Commissioner (Appeals) is contrary to the provisions of Section 107(11) of the CGST Act, which provides for issuance of show cause notice, where appellate authority is of the opinion that the tax was erroneously refunded and no order could have been passed requiring the assessee to pay such tax without giving opportunity of hearing. It was, therefore, submitted that the impugned order dated 28.05.2019 passed by the Commissioner (Appeals) is in violation of the principles of natural justice. 9. It was further submitted that the show cause notice dated 22.10.2020 issued by respondent No. 4 relying upon the provisions of Section 73(10) of CGST Act, whereby time limit for issuance of the order under Section 73(9) was 3 years from the due date of furnishing the annual return for the financial year to which the refund was erroneously sanctioned is contrary to the provisions of Section 75(1), which provides that the service of notice or issuance of the order if any stayed by the order of the Court or Appellate Tribunal, the period of such stay shall be excluded in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prescribed. In this regard, section 164 of CGST Act, 2017 provides the government the power to make rules for carrying out the provisions of the Act. Further section 168 of CGST Act, 2017 provides the Board power to issue instructions or directions if it considers it necessary or expedient for the purpose of uniformity in implementation of GST Act. (8) In accordance with this, the government has notified sub-rule (4) and (5) of rule 89 of CGST Rules, 2017 wherein two scenario are mentioned in which refund of unutilized input tax credit is allowed. These two scenarios are zero rated supplies made without payment of tax and inverted tax structure. It has been prescribed in sub-rule (4) and (5) of rule 89 of CGST Rules, 2017 that the amount of refund under these scenarios is to be calculated using the formulae given in the said subrules. The formula uses the phrase 'Net ITC' and defines the same as "input tax credit availed on inputs and input services during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both". Board vide their Circular No. 37/11/2018-GST dated 15th March, 2018 (Copy enclosed) clari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed total refund of Rs. 16,86,81,772/- for the August, 2017. Thus it appeared that the claimant had claimed excess refund claim of ITC. In view of the above, it appeared that the claimant had filed refund claim of Rs. 13,02,96,326/- of unutilized ITC of IGST for the relevant period i.e. August-2017. Further, it was observed that the unutilized input tax credit of IGST available at the end of August-2017 is only Rs. 7,60,86,883/-. Thus it appeared that the claimant has claimed excess refund of Rs. 5, 42 ,09,443/ - [( Rs. 0.13, 2 ,96,326/-)-( Rs. 7,60,86,883/-)] of IGST input tax credit is inadmissible and liable for rejection. (12) Thus it is evident that there was not sufficient unutilized Input Tax Credit available with the claimant for the refund under Sub-section (3) of Section 54 of CGST Act, 2017. As such the claimant's contention regarding computation of the refund claim as per the formulae does not hold good and is therefore unacceptable. (13) It is observed that as per sub-section (3) of the Section 54 of the CGST Act, 2017 "a registered person may claim refund of any unutilized input tax credit at the end of any tax period." It is however evident that the said c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15th March, 2018, it was clarified "as the transitional credit pertains to duties and taxes paid under the existing laws viz., under Central Excise Act, 1944 and Chapter V of the Finance Act, 1994, the same cannot be said to have been availed during the relevant period and thus, cannot be treated as part of 'Net ITC'." 12. Relying upon the above averments, it was submitted that the Commissioner (Appeals) has rightly allowed the appeal filed by the department are required to be upheld as there was no balance available in the electronic credit ledger in the months of July and August, 2017 so as to grant the refund as mandatory under Section 54(3) of the CGST Act. It was, therefore, submitted that the Commissioner (Appeals) after referring to Circular No. 59/33 (2018-GST dated 04.09.2018) has rightly allowed the appeals filed by the department by setting aside the order in originals sanctioning the refund to the petitioner. 13. Having heard learned advocates for the respective parties and having considered the facts of the case, short question which arises for consideration in this petition is whether the transitional credit as per the form Trans-1 filed by the petitioner an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 interest had not been passed on to any other person." Rule 89. Application for refund of tax, interest, penalty, fees or any other amount: "(4) In the case of zero-rated supply of goods or services or both without payment of tax under bond or letter of undertaking in accordance with the provisions of sub-section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), refund of input tax credit shall be granted as per the following formula:- Refund Amount= (Turnover of zero-rated supply of goods+ Turnover of zero rated supply of services) x Net ITC divided by Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Central Tax and the Commissioner of State Tax. In case such an order has not been issued in the State, the registered person is at liberty to apply for refund before the Central Tax Authority or State Tax Authority till the administrative mechanism for assigning of taxpayers to respective authority is implemented. However, in the latter case, an undertaking is required to be submitted stating that the claim for sanction of refund has been made to only one of the authorities. It is reiterated that the Central Tax officers shall facilitate the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 994 (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 availing 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 goods procured in the erstwhile regime. iii) Credit of taxes paid on stock of raw materials, work-in-progress and finished goods as on 30.06.2017. iv) Credit relating to goods exempted under the earlier regime which are taxable under the GST regime. v) Credit of in transit goods and services on which taxes are paid in the erstwhile regime and such goods and services are received in the GST regime." 18. Rule 117 of the Rules provides that if a registered person has to claim Transitional Credit under Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 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 case as the petitioner is entitled to get the benefit of carried forward of CENVAT credit as on 01.07.2017 in view of the provisions of Section 140(1) read with Section 54(3) of the CGST Act, 2017 read with Rule 89(4) and 117 of the Rules. 21. It is not in dispute that the petitioner was entitled to the refund on the zero rated supplies and only ground for allowing the appeal of the department by the CIT appeals is that no balance was available in electronic credit ledger as on the date on which the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
