TaxTMI 
TaxTMI 
2021 (11) TMI 153
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....ged in the business of trading of electronic goods over e-commerce platform by obtaining registration under the provisions of Goods and Service Tax Laws; that the petitioner procures electronic goods from various vendors based on forecasted demand of business and maintains huge inventory for the purpose of ensuring timely deliveries; that as a result of purchases effected by it, a very high balance of input tax credit of GST paid on its purchases is available in the electronic credit ledger; that on receiving orders through Electronic Commerce Operator (for short, 'ECO'), the sale is affected through ECO and goods are dispatched to customers; and that the tax liability is discharged by the petitioner by debiting the Electronic Credit ledger. 3. The petitioner would further contend that upon effecting the sale through the e-platform of ECO, the consideration is received by the ECO from the customers and is remitted to the petitioner thereafter. 4. The ECO, before remitting the amount for the supply of goods effected through it to customers, retains a percentage of amount from and out of such consideration received and deposits such amount retained by the ECO with the Government in....
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....cess amount available in the electronic cash ledger, the 3rd respondent examined the said refund sanction order dt.18.09.2019 and passed review order dt.09.06.2020 observing that the refund was sanctioned without examining whether the principle of "unjust enrichment" has been complied with as required under Section 54(5) read with Section 54(8) of the CGST Act, and the impugned refund sanction order is legally improper, and authorized the adjudicating authority for filing an appeal before the Commissioner as provided under the CGST Act. 9. It is contended that based on the said authorization granted by the 3rd respondent, the 5th respondent, who initially passed the refund sanction order, filed an appeal before the 4th respondent on 24.06.2020; that upon filing of the said appeal by the 5th respondent, the petitioner filed Memorandum of Cross Objections on 19.10.2020 contending that the TCS amount collected by the ECO and deposited with the Government represents the portion of the consideration receivable by the petitioner for supplies made through ECO; that the balance in electronic cash ledger is the amount of the consideration receivable by the petitioner and it is entitled to ....
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....n 109 of the CGST Act; that though the regional GST Tribunal has not been established as on date, by virtue of the order issued by CBIC, vide order No.9/2019-Central Tax dt.03.12.2019, the three months period for filing of appeal has to be considered from the date of communication of the order or the date on which the President or the State President, as the case may be, of the Appellate Tribunal, after its constitution under Section 109 of the CGST Act, enters office; that the CBIC by its Circular No.132/2/2020GST dt.18.03.2020 further clarified the issue of filing appeal before the Appellate Tribunal; that the time limit to make application to the Appellate Tribunal will be counted from the date on which the President or the State President enters the office and that the appellate authority may dispose of all the pending appeals expeditiously without waiting for the constitution of the Appellate Tribunal. 16. On the basis of the above, the respondents claim that the petitioner is expected to first exhaust the channel of appeal before the Appellate Tribunal and not by way of filing the present writ petition under Article 226 of the Constitution of India. 17. The respondents also....
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....y and collection of tax called 'Central Goods and Services Tax'. 25. Chapter X deals with Payment of Tax. Section 49 deals with payment of tax, interest, penalty, fee or any other amounts; Section 51 deals with 'Tax deduction at source'; Section 52 deals with 'Collection of tax at source'. 26. Chapter XI deals with Refunds. Section 54 thereof deals with 'refund of tax'. 27. The 'electronic cash ledger' as defined in Section 2(43) of the CGST Act makes a reference to the electronic cash ledger referred to in subsection (1) of Section 49 thereof. Section 49(1) of the CGST Act reads as under: '(1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using debit or credit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.' 28. A reading of the above provision indicates that every deposit made towards tax, interest, penalty, fee or any other amount using any of the mode of payment stands credite....
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....hrough it to be paid to the Government within ten days after the end of the month in which such collection is made. Sub-sections (4) and (5) of Section 52 of the CGST Act mandates such ECO to file monthly and annual statements electronically providing the details of outward supplies effected through it and the amount collected under sub-section (1) during the month and financial year. 32. In the normal course of business, ECO would be required to remit to the supplier the consideration received by it, but for the provisions of Section 52(1) of the CGST Act. Thus, it is by virtue of operation of law, the ECO is required to deduct and remit to Government, the specified percentage of amount from and out of the net value of taxable supplies effected, which otherwise is the value receivable by the supplier. It is in this context, the Sub-section (7) of Section 52 specifies that the supplier who had supplied the goods or services or both through ECO shall claim credit in his electronic cash ledger of the amount collected and reflected in the statement of the ECO furnished under sub-section (4) on a monthly basis. 33. In the counter affidavit filed the respondents have taken a stand tha....
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....s of subsection (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed. 38. The Section 54(1) of the CGST Act, is in two parts. 39. Sub-section (1) of Section 54 deals with refund of tax and interest, if any, paid on such tax or any other amount paid by him by making an application before expiry of two years from the relevant date. The claim for refund contemplated under sub-section (1) is in respect of tax paid on outward supplies or such refund arising on account of dispute relating either rate of tax or exemption or pre-deposit. Thus, under sub-section (1) of Section 54 refund can be claimed by (i) any person (ii) of any tax or interest, if any, paid on such tax or any other amount paid by him. 40. On the other hand, the proviso to sub-section (1) of Section 54 of the CGST Act covers the second category of refund to be claimed by a registered person of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of Section 49. Under the proviso, there is no reference either 'tax, interest, if any, paid on such tax, or any other amount' or "paid by him". It merely refers to a regis....
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....he supplier is not able to use the amount lying in the said cash ledger, the actual supplier may claim refund of the excess balance lying in his electronic cash ledger in accordance with the provisions contained in Section 54(1) of the CGST Act.' 45. The above clarification provided by the CBIC in the form of question and answer, in our view, leaves no doubt as to the entitlement of the petitioner to claim refund of the excess balance in its electronic cash ledger, which includes the amount that has been collected by the ECO under Section 52 of the CGST Act from the net value of consideration payable to the petitioner in respect of sales/supplies effected through it, as such amount paid to the Government is allowed as a credit in the electronic cash ledger of the petitioner under Section 49(1) of the CGST Act and such balance being eligible for refund under Section 49(6) of the CGST Act. Therefore, the petitioner is entitled to claim refund of the balance in electronic cash ledger under proviso to sub-section (1) of Section 54 of the CGST Act. 46. It is also the stand of the 4th respondent that the said clarification provided by the CBIC does not bind the said authority dischargi....