TaxTMI 
TaxTMI 
2019 (7) TMI 1395
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....entral Act prior to adjustment of such tax credit towards crystalized liability under the VAT Act and the Central Act; C. Pending notice, admission and final hearing of this petition, this Hon'ble Court be pleased to allow the Petitioners to file final return in Form 205B without requirement of reduction of input tax credit under clause 12.5(c) of Part IV read with Annexure V of the said Form; D. Ex parte ad interim relief in terms of prayer C may kindly be granted; E. Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioners shall forever pray." 2. The case of the writ-applicants, in their own words as pleaded in the writ-application, is as follows : "2. The relevant facts giving rise to the present petition are briefly stated herein below: The 1st Petitioner is a Public limited company having its place of business at Survey No. 590, 591, 593, Village Bhimsar, Taluka Anjar, District Kutch. The 2nd Petitioner is Authorized Signatory of the 1st Petitioner and his rights and interest are directly affected by the impugned form prescribed by way of noti....
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....tatutory declaration forms are submitted before the assessing authorities as and when the assessment for the concerned year is taken up under the Central Act. Since the statutory forms are to be obtained from respective State authorities, minor delays in obtaining the forms is quite routine. In majority cases such declaration forms are obtained and produced by the time assessment is finalized. In case where declaration forms cannot be produced at the assessment stage but the Petitioners anticipate receipt of such forms, appeal is filed for challenging the assessment order and thereafter on receipt of such forms from customers/branches they are produced before the appellate authority. The Petitioners say that this is a routine procedure which is followed throughout the country. 8. The monthly returns for the period from 1.4.2017 to 30.6.2017 were duly filed by the Petitioners wherein tax under the VAT Act was paid by way of adjustment of input tax credit and the minor outstanding tax credit was thereafter adjusted against liability of tax under the Central Act. 9. From 1.7.2017 the GST regime was introduced in our country. The Petitioners therefore migrated from the VAT Act to....
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....nnexure V. 15. A reference to Annexure V is made in Part IV of the form whereby as per clause 12.5(c) the amount of admissible input tax credit is required to be reduced "on account of tax payable as per Annexure V". In other words the amount of eligible input tax credit under the VAT Act is required to be reduced by alleged tax payable on account of outstanding declaration forms under the Central Act of previous years before adjustment of such credit is allowed towards liability of tax under the VAT Act. 16. In the respectful submission of the Petitioners the impugned clause 12.5(c) of Part IV of the final return as prescribed in Form 205B is ultra-vires the provisions of the VAT Act as well as the rules framed thereunder. 17. The Petitioners say that Section 13 of the VAT Act clearly provides that the net amount of Value Added Tax for a tax period payable shall be determined after adjustment of tax credit in the manner as may be prescribed. Accordingly it is provided in Rule 18(1) of the VAT Rules that the net amount of tax payable under section 13 of the VAT Act shall be determined in the monthly return to be filed in Form 201. The prescribed form for monthly return in ....
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....Form 205B is resulting into a situation where the Petitioners would become liable to pay tax as per final return under the VAT Act in spite of the fact that the Petitioners have no liability as per the provisions of the VAT Act. It is therefore respectfully submitted that clause 12.5(c) of Part IV of Form 205B as well as Annexure V of the said form deserve to be struck down and declared as contrary to the provisions of the VAT Act and the rules framed thereunder. 22. The Petitioners may point out that Section 140(1) of the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as "the SGST Act") provides for transfer of excess input tax credit balance as on 30.6.2017 under the VAT Act into the electronic credit ledger under the GST Acts. The 2nd Proviso to the said Section provides that in case such credit is attributable to any claim of concessional rate or exemption under the Central Act which is not substantiated by declaration forms then such credit shall not be credited into the electronic credit ledger under the GST Acts. Thus there is an express provision debarring carry forward of excess input tax credit balance into the credit ledger under the GST Acts to the....
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....forward to the return of the subsequent tax period. Thus statutory provisions clearly allow adjustment of input tax credit against liability under the VAT Act and thereafter under the Central Act. The rule for furnishing of final return is only a procedural rule introduced because of migration into the GST regime. Clause 12.5(c) in Part IV of Form 205B read with annexure V which seeks to create fresh liability upon the Petitioners under the VAT Act on the basis of outstanding statutory declaration forms as on 30.6.2017 under the Central Act without there being any statutory provision to support such liability is ultra-vires the provisions of the VAT Act as well as the rules framed thereunder. B. In any case Section 13 of the VAT Act only empowers the Government to prescribe the manner in which the net amount of tax is to be calculated. The said provision does not empower the Government to disallow input tax credit which is available as per the provisions of the VAT Act and that too by introducing a column in a form prescribed for filing final return. Thus clause 12.5(c) in Part IV of Form 205B is as such beyond the competence of the State Government. C. Reduction of input tax....
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....7 into the GST regime. 2nd Proviso to the said section however provided for blocking of carry forward of input tax credit to the extent the same was attributable to inter-State sales made against declarations forms and such declarations forms were not available as per the prescribed period. Since the GST regime was implemented w.e.f. 1.7.2017, proviso was inserted in Section 63 of the VAT Act requiring dealers whose taxable turnover exceeded Rs. 25 lakhs to file final return for the period April to June 2017 in the prescribed manner. Rule 44(4) of the VAT Rules was enacted pursuant thereto whereby Form 205B was prescribed as final return. In such form while the 2nd Proviso to Section 140(1) of the GGST Act restricted carry forward of input tax credit attributable to inter-State sales to the extent of outstanding declaration forms, the impugned column for reduction of input tax credit was introduced prior to utilization of input tax credit against liability under the VAT Act. Thus essentially by virtue of the impugned column the Petitioner is required to reduce input tax credit under the VAT Act even before its utilization towards liability under the VAT Act towards non-crystaliz....
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....of input tax credit availed during the months of April to June 2017 applicab1e even to tax credit of previous year The learned Respondents have conceded by way of affidavit before this Hon. Court that input tax credit cannot be reduced in the final return form to the extent the same is availed in the months from April to June 2017. That being the case, there is no warrant in differential treatment to tax credit balance brought forward from the year 2016-17. Fact remains that irrespective of the period of availment of tax credit, if it has already been utilized towards crystalized VAT liability then the same cannot be sought to be reduced against possible CST liability without any substantial provision in this regard." SUBMISSIONS ON BEHALF OF THE RESPONDENTS : 5. This writ-application has been vehemently opposed by Mr.Kamal B.Trivedi, the learned Advocate General, appearing for the respondents. 6. Mr.Trivedi submitted that the grievance as redressed by the writ-applicants should not survive in the wake of few developments. In such circumstances, according to Mr.Trivedi, this Court may not go into the issue, whether clause 12.5(c) of Part IV of Form 205B is ultra vires the....
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....ase, the same would be prima facie subject to the local rate of tax at 15%, subject to submission of 'C' Forms at a later date, inviting contingent CST liability of Rs. 30,000/- for that transaction. Since he has already shown Rs. 4,000/- in his Return as tax paid, there will be net contingent CST liability of Rs. 26,000/-, for which, the assessee will not be allowed to carry forward the balance ITC of Rs. 18,500/- in Final Return i.e. Form 205B prescribed under the Gujarat VAT Rules. (g) In view of the aforesaid, the ITC balance would become Nil and the remainder amount (i.e. Rs. 18,500 - Rs. 26,000 = -Rs. 7,500/-) will be considered as tax payable at the time of the assessment/provisional assessment for that year. (h) Now, as and when, 'C' Forms are produced, then in that eventuality, as provided in third proviso to sub-section (1) of Section 140 of Gujarat GST Act, the assessee would be given refund of Rs. 18,500/- on one hand and on the other, no question would arise about assessing any liability with reference to the above referred Rs. 7,500/- (i) Pertinently in case of the petitioner company, total contingent CST liability is in the order of Rs. 44,04....