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TMI Blog2024 (12) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... not have adopted an hyper-technical approach by depriving the petitioner of the CENVAT credit which was available as on 01.07.2017 on the ground that such credit was reflected in the Electronic Credit Ledger only in the month of August, 2017 on processing of the Form GST TRAN-1. The impugned Orders dated 19th February, 2019 passed by the Commissioner (Appeals) and the Order-in-Original dated 29th April, 2021 passed by the Additional Commissioner as well as the show-cause notice dated 15.10.2021 are accordingly quashed and set aside. Petition allowed. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE D.N.RAY Appearance : For the Petitioner(s) No. 1: Mr Anand Nainawati (5970). For the Respondent(s) No. 1: Mr Ankit Shah (6371). For the Respondent(s) No. 2,3,4,5,6,7: Mr Nikunt K Raval (5558). COMMON ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr. Anand Nainawati for the petitioner and learned advocate Mr. Nikunt K. Raval for the respondents. 2. Rule, returnable forthwith. Learned advocate Mr. Nikunt Raval waives service of notice of rule for and on behalf of the respondents. 3. Having regard to the controversy in narrow c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period. 6.4. The petitioner availed the ITC for payment of the GST for three months period i.e. from July, 2017 to September, 2017 as under : Period ITC availed Credit Utilized IGST CGST SGST IGST CGST SGST July 2017 1,36,86,453 1,82,82,318 1,82,82,318 1,36,86,453 towards IGST 2,19,38,492 towards CGST and 64,68,10,149 towards IGST 1,82,82,318 towards SGST August, 2017 39,81,78,094 10,99,67,378 10,99,67,378 39,81,78,094 towards IGST 1,79,83,468 towards CGST and 1,29,12,051 towards IGST 1,79,83,468 towards SGST September, 2017 76,58,08,834 30,18,80,220 30,18,80,220 47,11,71,982 towards IGST 3,63,40,644 towards CGST 3,63,40,644 towards SGST 6.5. For the month of July, 2017, the petitioner had completely utilised the IGST and State GST Credit availed for payment of tax, however, with respect to payment of Central GST liability through available ITC, the petitioner discharged it by utilising available transitional credit. 6.6. For the month of August, 2017, the petitioner completely utilised the IGST Credit availed in the said month for payment of tax and with respect to CGST and SGST liability, the same was discharged through utilisation of ITC pertaining to CGST and SGST respectively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the respondent No. 5 praying for setting aside the refund sanctioning Orders. The respondent No.6 accordingly preferred Appeals before the respondent No. 5 challenging the refund sanctioning Orders on the ground that the petitioner did not have any unutilised ITC ignoring the transitional credit in the Electronic Credit Ledger of the petitioner and therefore it was contended that the sanction of the refund was required to be withdrawn in absence of any unutilised ITC under the IGST, CGST and SGST Head in the Electronic Credit Ledger. 6.12. The respondent No. 5-Commissioner (Appeals) by the impugned order dated 19th February, 2019 quashed and set aside the orders sanctioning the refund and confirmed the recovery of the refund along with the interest as under and accordingly, the Appeals were allowed: Months IGST (In INR) CGST (In INR) SGST (In INR) July 2017 76,45,397 1,02,12,695 1,02, 12,695 August 2017 24, 15,27,719 NIL NIL September 2017 26,38,53,397/- NIL NIL 6.13. Being aggrieved, the petitioner has preferred this petition being Special Civil Application No.19453 of 2021. 6.14. Subsequent to the passing of Order-in-Appeal, the respondent issued an intimation of demand of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of transitional CENVAT Credit as the credit was not made on 28th August, 2017 and the same was made subsequently on process of the Form GST TRAN-I. It was therefore submitted that such credit would relate back to the date of 1st July, 2017 and accordingly, the petitioner could not have been prevented or deprived of utilising the said credit for payment of the GST for the month of July, 2017 as the petitioner was entitled to utilise such credit. 7.2. It was further submitted that the issue is no more res-integra in view of the decision of this Court in case of M /s. Intas Pharmaceuticals Limited versus Union of India and Others in Special Civil Application No.12712 of 2019 rendered on 10th January, 2024 which was followed in case of M/s. Torrent Pharmaceuticals Limited versus Union of India and Others in Special Civil Application No.17988 of 2019 and other allied matters rendered on 14th June, 2024. 7.3. Learned advocate Mr. Anand Nainavati also has filed the details of the Orders for three months while sanctioning the refund to the petitioner as under to demonstrate that the original Adjudicating Authority after considering the provisions of Section 140 of the CGST Act has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner. 9. Having heard the learned advocates for the respective parties and considering the facts of the case, the issue in this petitions pertaining to un-utilised ITC after considering the CENVAT credit as per the Form GST TRAN-1 is no more res-integra in view of the decision in case of M /s. Torrent Pharmaceuticals (Supra) wherein, it is held as under : 6. The issue arising in these petitions pertaining to the refund of unutilized ITC of zero rated supplies of the petitioners is already considered and decided by the order of even date in Special Civil Application No. 12712 of 2019 wherein it is held as under:- 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 and accepted by the department can be considered as an opening balance in electronic credit ledger as unutilized ITC available for granting refund as per the provisions of Section 54 (3) of the CGST Act to the petitioner as per the claim made by the petitioner in form RFD-01A. 14. It would, therefore, we germane to refer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant 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 Adjusted Total Turnover Where,- (A) Refund amount means the maximum refund that is admissible; (B) Net ITC means input tax credit availed on inputs and input services during the relevant period; (C) Turnover of zero-rated supply of goods means the value of zerorated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking; (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 processing of the refund claims of all registered persons whether or not such person was registered with the Central Government in the earlier regime. 16. The CBIC thereafter issued a Circular No. 59/23/2018-CGST dated 04.09.2018, whereby it is clarified that measure of the amount of refund, which is eligible to the applicant seeking refund unutilized of credit of ITC on account of zero-rated supply of goods are pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 140 of the CGST Act, a declaration in Form GST TRAN-1 was required to be filed within 90 days of the appointed day i.e. on or before 28.09.2017. As per the provisions of Section 140 of the CGST Act read with Rule 117 of the Rules, the transitional credit, closing balance of credit of taxes lying and shown in last return filed by the assessee prior to introduction of CGST i.e. as on 30.06.2017 will be carried forward as credit in Electronic Credit Ledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich 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 petitioner was entitled to get refund i.e. end of the month i.e. July, 2017 and August,2017 because the carried forward of CENVAT credit erstwhile regime was approved 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. 22. In view of the above analysis and foregoing reasons, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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