Document Fragment View

Matching Fragments

NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined 7.7. It was submitted that there is no claim made by the petitioner for refund before the respondent No.2 and in absence of such claim, the respondent cannot process such refund claim and the reliance placed by the petitioner on Rule 15(6) of the VAT Rules is not applicable as the said Rule only refers to the "admissible credit in the year in which remained unadjusted against output tax". It was submitted that carried forward ITC to the next period which is required to be adjusted against the future output tax liability because the objective, purpose and reason for carry forward of ITC itself is a mechanism to adjust and neutralize the taxes which are already paid on inputs to set-off against the future output tax liability. It was therefore submitted that once the petitioner has failed to show the carry forward of such unadjusted NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined tax credit in Form GST-TRAN-1 as required under Section 140 of the GST Act, the petitioner cannot claim refund of the same under the provisions of the VAT Act. 7.8. It was further submitted that Section 142(3) of the GST Act is not applicable in the facts of the case as there was no claim for refund which is mandatory requirement under the said provision and under the proviso to said Section which stipulates that no refund is to be granted under the same as carried forward in the GST Act. It was further submitted that as the VAT Act is repealed and as the definition of tax period as per the provisions of Section 2(28) of the VAT Act is also repealed and in absence of no further tax period, the submission made on behalf of the petitioner is without any basis and as per the amendment to VAT Act in 2017, the definition NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined of "tax period" as per Section 2(28) of the VAT Act and the definition of "year" under Section 2(36) of the VAT Act still exist and therefore, the tax period automatically continues in the GST regime and therefore, as per the provisions of Sections 139 to 142 of the GST Act, the petitioner was required to show the unutilised tax credit in Form GST- TRAN-1 so as to see that the same is carried forward in the electronic credit lesger as per the provisions of the GST Act. 7.9. Learned AGP Mr. Raj Tanna submitted that once the petitioner is migrated under the GST regime in terms of Section 139 of the GST Act, then the condition and time limit of Section 140 of the GST Act read with Rule 117 of the GST Rules are mandatorily applicable and even if the petitioner has filed Form GST- TRAN-1 with NIL amount, the petitioner is NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined bound by the decision of the Hon'ble Apex Court in case of Union of India versus Filco Trade Private Limited dated September 2,2022 in Miscellaneous Application Nos. 1545- 1546/2022 in SLP(C)No. 32709-32710/2018, whereby time to file Form GST-Tran-1 was extended but the petitioner has failed to file a revised GST-TRAN-1.

7.15. In support of his submissions, reliance was placed on the decision of this Court in case of Willowood Chemicals Private Limited versus Union of India reported in (2018) 98 taxmann.com 100 (Gujarat), decision of the Hon'ble Bombay High Court in case of JCB India Limited versus Union of India NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined reported in (2018) 92 taxmann.com 131 (Bombay) as well as the decision of the Hon'ble Madras High Court in case of P.R.Mani Electronics Versus Union of India reported in (2020) 117 taxmann.com 868 (Madras) in which it was held that the ITC is a Concession and not a Vested/ Indefeasible/Constitutional Right and therefore, the claim cannot be for indefinite period and for lapsing of the credit, strict adherence to time limit, an application for refund has to be in existence. 7.16. It was therefore submitted that the reliance placed by the petitioner on provisions of Section 174(2)(c) of the GST Act being a saving clause cannot lead to an endless litigation if transitional provisions are not adhered to by the petitioner. It was therefore submitted that the petitioner is not entitled to the refund in absence of failure NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined of the petitioner to disclose unadjusted unutilised tax credit in Form GST-TRAN-1. 7.17 . Reliance was placed on the decision of the Patna High Court in case of Graphite India Limited versus State of Bihar reported in (2024) 164 taxmann.com 556 (Patna) which talks about the ITC not carried forward from VAT to GST through GST-TRAN-1 and only be claimed as set-off against the output tax and not as cash refund. It was therefore submitted that the petition is liable to be rejected as the petitioner is not entitled to the refund of the amount of unadjusted tax credit. REJOINDER OF THE PETIITONERS:

8.3. It was submitted that the petitioner has also filed an additional affidavit dated 19.12.2024 which is supported by the Certificate of the Chartered Accountant to demonstrate that the petitioner has not carried forward the unadjusted unutilised tax credit in the GST regime. Learned advocate Mr.Kuntal Parikh has also invited the attention of the Court to the screenshot of the GST Portal to show that the petitioner has NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined not filed Form GST-TRAN-1 which is certified by the Chartered Accountant in the Certificate. It was therefore submitted that the reliance placed by the respondent on the various judgments are not applicable to the facts of the case because in none of the case it has been held that filing of Form GST-TRAN- 1 is mandatory.

section (3) of Section 11 of the VAT Act within the period of which the refund under Sub-rule becomes admissible.

18. On conjoint reading of the provisions of Rule 15(6) of the VAT Rules as well as the proviso thereto, and applying the same to the facts of the case, it is not in dispute that NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined the petitioner has shown the amount of the credit to be carried forward in the next tax period and has not carried forward in Form GST-TRAN-1 and it is also not in dispute that the petitioner has discharged the liability under the GST Act for the month of July, 2017 onward and as no GST-TRAN-1 Form was filed by the petitioner, there is no credit in the electronic credit ledger of the petitioner vis-a-vis the credit which was shown to be carried forward in the next tax period in the VAT return filed in VAT Form 201. Therefore, as a natural corollary, the petitioner has been able to prove that the goods upon which such credit was shown to be carried forward to next tax period have been disposed of as per the provision of Sub-section (3) of Section 11 of the VAT Act and therefore, there is a compliance of the proviso to Rule 15(6) of the NEUTRAL CITATION C/SCA/9872/2024 JUDGMENT DATED: 20/03/2025 undefined VAT Rules. It is therefore, incumbent upon the respondent No.2 to sanction the refund of Rs.3,90,762/- which has remained unadjusted unutilised tax credit as on 30th June, 2017 in the VAT return of the petitioner.