TaxTMI 
TaxTMI 
2022 (3) TMI 544
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....n up and traversed. 3. The petitioner is engaged in providing various construction services to Government/Private parties and was registered with the erstwhile Service Tax Department. From 01.07.2017 as the GST regime has come into effect, the petitioner has shifted to GST regime from that date. The petitioner had filed last service tax return in the erstwhile regime for the quarter from April to June 2017 by 15.08.2017. 4. During the course of audit of accounts conducted by CERA Audit party for the erstwhile regime, it was pointed out that, the petitioner is liable to pay service tax under reverse charge on services rendered at two quarries, for which, royalty had been paid by the petitioner to the Government of Tamil Nadu for mining stones since such royalty payments are liable to service tax consequent to the issuance of Notification No.22/2016 ST dated 13.04.2016 with effect from 01.04.2016. In view of the amendment to Section 66 D(a) of the Finance Act, 1994, all services provided by Government or local authority to business entities have been made liable to service tax, subject to certain exemptions introduced by Notification 22/2016 dated 13.04.2016 and amending Not....
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....oner as he paid the service tax only on 30.12.2017. In order to get the refund of the said amount, because, the said service tax paid is purely an input tax, for which, credit can be taken by the petitioner under erstwhile Cenvat Credit Rules, he had made an application, of course within the time limit to the respondent/Revenue. However, the said application seeking for refund filed by the petitioner, having been considered, was rejected through the Order-in-Original No.19/2018 dated 24.09.2018. 9. In the said order, though the respondent has found that, the assesee is eligible for taking Cenvat credit of the amount so paid under Service Tax Rules, since there was no provision in the new regime to allow as input tax credit in GST/credit in Electronic cash ledger/payment in cash and in the absence of any specific provision, such kind of plea made by the petitioner for refund of the input tax credit cannot be considered and refunded, therefore, the claim was untenable and accordingly, it was rejected. Aggrieved by the said order, the present writ petition has been filed. 10. Almost similar facts are projected in other two cases also and in order to have a quick reference, the r....
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....ore, on or after the appointed day i.e., 01.07.2017. For refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, such claim shall be disposed of in accordance with the provisions of existing law and any amount accruing to him shall be paid in cash. 13. The learned counsel appearing for the petitioners heavily relying upon sub-section (3) of Section 142 has further submitted that, if the refund claim is made either before the GST regime or on the date when the GST regime came into effect or after which, for refund of any amount of CENVAT credit, duty, tax etc., such refund claim application shall be disposed of only in accordance with the provisions of the existing law. 14. He would further state that, the existing law is nothing but the law which was prevailing prior to 01.07.2017. Here in the case in hand, under the Cenvat Credit Rules, 2004, if the petitioners are eligible to claim credit, the petitioners would also be eligible to make an application for refund under sub-section (3) of Section 142. 15. He would also submit that, if those opening is not made available to the persons like the petitioners who are placed in....
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.... by the petitioners is rejected and such a provision is available in the Act and it would be possible for the respondent to take the route of Section 142(3), the order impugned can be interfered with and set aside and it can be remanded back to the respondents for reconsideration to take up the application submitted by the petitioners for refund and decide the same if not for refund atleast for credit. Therefore, the learned counsel seeks indulgence of this Court in this regard. 20. However, on the other hand Mr. A.P. Srinivas and Mrs. Hema Muralikrishnan, learned Senior Standing Counsels appearing for the respondents in these cases would make the following submissions: (i) The only transitional provision for these kind of assessees available under the GST Act is Section 140. If Section 140 is invoked, the petitioner could have made an application under Section 140(1) of the Act, to take in his electronic credit ledger the amount of Cenvat credit of eligible duties carried forward in the return relating to the period ending with the day immediately preceding the appointed day. Which means, according to them, if at all the petitioners are eligible to claim any CENVAT cre....
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....output service shall not take CENVAT credit after one year of the date of issue of any of the documents specified in sub-rule (1) of Rule 9. (vii) Quoting this provision of the Cenvat Credit Rules, the learned Standing Counsel for the respondents would further contend that, the one year limitation which starts from the documents pertaining to the petitioners provided under sub-rule (1) of Rule 9 since already expired, as the petitioners admittedly availed the service prior to 30.06.2017, such a claim cannot be made even under the erstwhile Cenvat Credit Rules, therefore, on that account also, the petitioner is not entitled to, they contended. (viii) Further, the learned Standing Counsel would also submit that, the petitioners, instead of making an application within the time under Section 140(1) of the Act by making an application in GST TRAN-1 availing the opportunity to make such an application within the time i.e., on or before 27.12.2017, now had made a belated application, where, they claimed that, such application should have been dealt with under Section 142(3) of the Act, as if that, it is a refund claim of CENVAT credit. (ix) The learned Standing....
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....the amounts had not been paid. In W.P.No.1092 of 2019, service tax was paid on 30.12.2017 for a sum of Rs. 26,88,460/-, in W.P.No.528 of 2019 service tax had been paid by this petitioner on 02.05.2018 for a sum of Rs. 24,20,684/-, in the third case i.e., W.P.No.1160 of 2019, the petitioner had paid the Countervailing Duty as well as Special Additional Duty on 14.12.2017 to the extent of Rs. 68,96,064/-. In the first two cases, admittedly, the said payment itself was made beyond 27.12.2017 and in that third case, it was just 13 days prior to 27.12.2017. 23. When the GST regime has come into effect from 01.07.2017, under which, the erstwhile tax legislation governing the field hitherto since has been repealed or extinguished, necessarily the Legislature had to bring transitional provisions which they have done so. Accordingly, Sections 140 to 142 have been brought under GST Act wherein Section 140 has been provided as 'Transitional arrangements for input tax credit'. For the purpose of claiming the input tax credit under the GST regime also which otherwise accrued under the erstwhile regime on 30.06.2017 mainly this transitional provision under Section 140 has been made, w....
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....be carried forward under Section 140(1) transitional provision. 28. Here these amounts since have been paid as stated supra, sometime after the time limit for making the application under Section 140(1), these amounts whether can be sought for by way of credit transfer or refund in cash, is the next question. 29. In this context, it is the case of the petitioners, as projected by the learned counsel for the petitioners that, the application, therefore, was submitted by the petitioners only for refund as the word 'refund' alone has been mentioned in the other transitional provision under Section 142 in the head, 'Miscellaneous transitional provisions'. 30. If an application is submitted for refund claim under Section 142(3), the same shall be disposed of in accordance with the provisions of the existing law. Therefore, there can be no quarrel that, such application submitted under Section 142(3) shall be disposed of only in accordance with the erstwhile law prior to the GST regime. Here, the controversy arise is, the Revenue has taken a stand that, the application submitted by the petitioners if at all to be an application, it shall be only treated as applic....
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....t of this objection, the learned Standing Counsel appearing for the Revenue drew the attention of this Court to third proviso to Rule 4(1) of Cenvat Credit Rules which says that, the manufacturer or provider of output service shall not take Cenvat credit after one year of the date of issue of any of the documents specified in sub-rule (1) of Rule 9. 36. Elaborating further, it was the contention of the Revenue's counsel that, the documents pertaining to Rule 9(1) is nothing but payment of Service tax or duty as service tax as well as the duty which should have been paid immediately after taking the input service and also the import in respect of the respective cases. Conveniently, in these cases, since the petitioners have chosen to pay the service tax as well as the additional duty long after from that date, they have not satisfied the one year limitation provided under third proviso to Rule 4(1) of the Cenvat Credit Rules. 37. However, this point has been met by the learned counsel appearing for the petitioners, who would submit that, no doubt within one year from the date of issue of any of the documents specified under sub-rule (1) of Rule 9 alone such kind of claim b....
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....law prior to 30.06.2017 is not in much dispute. However, it is the vehement contention on the part of the Revenue that, what are all the eligible credit for which, credit can be taken by the petitioners during the transitional period was taken by the petitioners as on 30.06.2017, thereafter the subsequent payment made shall not form part of the credit accrued on 30.06.2017. Therefore, the subsequent amount paid anything cannot be treated as a input tax credit for the purpose of making the claim in the transitional period even for carrying forward the same to the electronic credit ledger under GST regime. 40. Insofar as the said objection of the Revenue is concerned, this Court feels that, insofar as these three cases are concerned, since the facts are very peculiar, where, the petitioners availed service prior to 01.04.2017, for which, the amount payable to them have been paid to the service provider, but the tax alone has not been paid i.e., service tax as well as the duty referred to above and this has been paid only after triggering the petitioners by the Revenue, but this payment has been made within the reasonable / permissible period. But, before making these payments sinc....
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....an very well be invoked. The "Doctrine of Necessity" has been best explained in (1996) 4 SCC 104, Election Commission of India and another Vs. Dr.Subramaniam Swamy and another and also in (2006) 3 SCC 276 in State of U.P. Vs. Sheo Shanker Lal Srivastava and others. In a Division Bench judgment of High Court of Delhi in the matter of Duncan Agro Industries Limited Vs. Union of India reported in 1988 (18) ECC 358, the [1985] 1 SCR 322, Mohapatra Company case has been followed. 45. Therefore, though normally the "Doctrine of Necessity" would only be invoked for want of forum, here in the case, it also can be construed that, if Section 142(3) is not permitted to be invoked in meeting situations like this, that situation would render that taxpayer remediless, hence, here also the "Doctrine of Necessity" can be invoked, in the considered opinion of this Court. 46. Since the language used in Section 142(3) of the Act is refund claim, the petitioner has made application for refund claim. However, under the erstwhile law, since the petitioners are not entitled to get any refund claim and their eligibility is confined only by taking the credit under Cenvat Credit Rules, beyond which, t....