TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 834
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....ined reading of Sections 54(3) and 29 of the Central Goods and Services Tax Act, 2017 (hereinafter, the "CGST Act"), it is evident that the current regulations do not provide for refund of unutilized ITC in case of discontinuation or closure of business. That, it is evidently clear from the provisions mandated in Section 54(3) of the CGST Act which is restricted to circumstances under which the unutilized ITC is allowed for refund, discontinuation/closure is not one of them. 3. In the instant Petition, the prayers put forth inter alia are to quash, delete and set aside the impugned Order dated 22-03-2023, passed by the Respondent No.3 rejecting the claim for refund of unutilized ITC, on closure of its business. Further, to order that, proviso to Section 54(3) of the CGST Act is not applicable in respect of refund of unutilized balance of ITC under Section 49(6) of the CGST Act. 4. The Petitioners case summarized is that, it was engaged in the business of manufacturing security inks and solutions with GST registration in the State of Sikkim. The manufacturing units of the Petitioners were in full operation in the pre-GST regime. The Petitioners in January, 2019, decided to discont....
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.... stipulated under Section 54 of the CGST Act. Moreover, Section 29(5) of the CGST Act provides for reversal of ITC upon cancellation of registration but not a refund. Besides, an effective alternative statutory remedy exists under Section 112 of the CGST Act which has not been exhausted by the Petitioners. That, the impugned Order being reasoned, proportionate and as per the statutory framework is not erroneous. The Petitioners attempt to seek refund of unutilized ITC on account of business closure is devoid of support in the statute. Consequently, the Petition deserves a dismissal. 6. The question that falls for determination in the instant dispute is whether the refund of ITC under Section 49(6) of the CGST Act is only limited to companies carved out under Section 54(3) of the CGST Act or does every registered company have a right to refund of ITC in case of discontinuance of business? 7. The parties were heard at length, all averments, documents on record perused as also the impugned Order. (i) In the first instance, the argument pertaining to non-exhaustion of statutory remedy is taken up. Apposite reference is made to the decision of the Supreme Court in State of U.P. and ....
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....or its dismissal. It is axiomatic that the High Courts (bearing in mind the facts of each particular case) have a discretion whether to entertain a writ petition or not. One of the self-imposed restrictions on the exercise of power under Article 226 that has evolved through judicial precedents is that the High Courts should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available. At the same time, it must be remembered that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the High Court under Article 226 has not pursued, would not oust the jurisdiction of the High Court and render a writ petition "not maintainable". In a long line of decisions, this Court has made it clear that availability of an alternative remedy does not operate as an absolute bar to the "maintainability" of a writ petition and that the rule, which requires a party to pursue the alternative remedy provided by a statute, is a rule of policy, convenience and discretion rather than a rule of law.............................." (iii) It is evident in the instant matter no question of fact requires determ....
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.... be allowed in cases other than- (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: Provided further that no refund of unutilized input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies." (iii) The Appellate forum in the impugned Order dated 22-03-2023, was of the view that Section 54(3) of the CGST Act was applicable only to the two circumstances mentioned in the said Section and would not extend to refund of unutilized input tax on account of closure of business. (iv) On this facet, we may relevantly consider the decision in Slovak India Trading Company Private Limited (supra) where the High Court of Ka....