Input tax credit on capital goods cannot be refunded outside the governing VAT and GST transition framework.

Input tax credit on capital goods under the Uttar Pradesh VAT regime was stated to be claimable only in the manner permitted by the governing statute, with Rule 24(a) allowing instalment-wise availment in later years. After GST commenced on 01.07.2017, transitional claims had to be carried forward under the GST mechanism, and no material showed filing of TRAN-1. The note also records that the Uttar Pradesh VAT framework did not provide for refund of input tax credit earned on capital goods. On that basis, the refund claim was treated as not maintainable and the challenge to the Tribunal's order failed.

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Issues: Whether refund of input tax credit on capital goods could be claimed under the Uttar Pradesh VAT regime after the GST transition, and whether the absence of TRAN-1 filing defeated the claim.

Analysis: The claim related to input tax credit on capital goods acquired in the relevant assessment year. Rule 24(a) contemplated availment of such credit in three equal instalments in the subsequent years. Once GST came into force from 01.07.2017, transitional claims were to be carried in the prescribed manner under the GST transition mechanism. No material was shown to establish filing of TRAN-1. The Court also found that the Uttar Pradesh VAT framework did not prescribe a refund of input tax credit earned on capital goods.

Conclusion: The refund claim was not maintainable and the challenge to the Tribunal's order failed.

Final Conclusion: The revision was rejected and the question of law was answered against the assessee.

Ratio Decidendi: Input tax credit on capital goods can be claimed only in the manner and to the extent permitted by the governing statutory regime, and where the VAT law does not provide for refund and the transitional GST claim is not duly carried forward, such refund cannot be granted.

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