TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1840
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.... have further prayed for directing the respondents to grant refund of Rs. 3,90,762/- for the period 1st April, 2017 to 30th June, 2017 along with appropriate interest on such refund. 4. The brief facts of the case are as under: 4.1. The petitioner-firm which was registered under the VAT Act, filed quarterly return in VAT Form 201 of quarter 1st April, 2017 to 30th June, 2017 as per Section 29(1) of the VAT Act read with Rule 19(3B) of the Gujarat Value Added Tax Rules, 2003 (for short 'the VAT Rules'). 4.2. It is the case of the petitioner that in the said return, the petitioner claimed unutilised excess input tax credit of Rs. 3,90,762/- and shown as carried forward to the next tax period. 4.3. However, with effect from 01.07.2017, the Central/State Goods and Services Tax Act, 2017 (for short 'the GST Act') came into effect and the registration of the petitioner under the VAT Act was migrated under the GST Act as per the provisions of Section 139 of the said Act with effect from 01.07.2017, however, the petitioner did not transfer the excess input tax credit of the VAT Act by filing the Form GST TRAN-1 as per section 140 of the GST Act. 4.4. The petitioner therefore by letter....
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....cancelled if the conditions so prescribed are not complied with. Section 140 of the GST Act: Transitional arrangements for input tax credit. (1) A registered person, other than a person opting to pay tax under section 10, shall be entitled 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, furnished by him under the existing law within such time and] in such manner as may be prescribed: Provided that the registered person shall not be allowed to take credit in the following circumstances, namely:-- (i) where the said amount of credit is not admissible as input tax credit under this Act; or (ii) where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date; or (iii) here the said amount of credit relates to goods manufactured and cleared under such exemption notifications as are notified by the Government. 142. Miscellaneous transitional provisions.-- xxxx (3) Every claim for refund filed by any person before, on or after the appointe....
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....ment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or (e) affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed; or (f) affect any proceedings including that relating to an appeal, review or reference, instituted before on, or after the appointed day under the said amended Act or repealed Acts and such proceedings shall be continued under the said amended Act or repealed Acts as if this Act had not come into force and the said Acts had not been amen....
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....e, revised returns and annual returns furnished by such dealer are correct and complete, and (c) a notice for audit assessment under sub-section (2) of section 34 has not been served on such dealer within such period as may be prescribed, such dealer shall be deemed to have been assessed for that year: Provided that the Commissioner of his own motion within a period of three years from the end of the year in respect of which or part of which the tax is assessable, may call for and examine the record of such dealer who has been deemed to have been assessed and after serving notice and giving the dealer an opportunity of being heard, pass such order thereon in accordance with the provisions of section 34, as the Commissioner may thinks just and proper. Section 34 of the VAT Act: (1) Subject to the provisions of sub-section (2), the amount of tax due from a registered dealer shall be assessed in the manner hereinafter provided, separately for each year, during which he is liable to pay tax. (2) (a) Where, (i) the Commissioner is not satisfied with the bona fides of any claim of tax credit, exemption, refund, deduction, concession, rebate; or genuineness of any declaration ....
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....mount shall be refunded not later than expiry of two years from the end of the year in which such tax credit had become admissible: Provided that the dealer claiming such refund shall have to prove to the satisfaction of the assessing authority that the purchases of the goods on which such tax credit had been calculated have been disposed off in the manner referred to in sub-section (3) of section 11 within the period by which refund under this sub-rule becomes admissible. Rule 30 of VAT Rules 30. Particulars and supporting documents under section 33.- (1) Every registered dealer, other than a dealer who has been granted permission to pay lump sum tax under section 14, shall furnish,- (a) Form 201 alongwith the Forms Form 201. 201A, 201B and 201C appended to (b) the forms on the strength on which he has availed exemption from or concession of tax under any provision of the Act or the Central Act along with the annual return in Form 205. (c) Form 212 and Form 213 in case of a dealer dealing in the commodities mentioned in Schedule III to the Act. (2) Notice required to be given under clause (c) of sub-section (3) of section 33 shall be in Form 302 and such notice s....
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.... Section is created by provisions of law, then the Court must give full effect to such Section. It was therefore submitted that when the petitioner is deemed to have been assessed under Section 34(2) of the VAT Act and as per the Rule 15(6) of the VAT Rules, the respondent No. 2 ought to have granted the refund of admissible tax credit which has remained unadjusted. 6.5. In support of his submissions, reliance was placed on the decision of the Hon'ble Apex Court in case of Union of India versus Jalyan Udyog reported in 1993 (68) ELT 9 (SC) and decision in case of State of Maharashtra versus Swanstone Multiplex Cinema Private Limited reported in (2009) 8 SCC 235. 6.6. It was further submitted that the petitioner has shown unadjusted excess credit under the head "amount of tax credit carried forward to the next tax period" and the term "tax period" has been defined under Section 2(28) of the VAT Act which reads as "tax period means calendar month or quarter as may be prescribed by the State Government". It was thereafter submitted that the term "prescribed" means "prescribed by rules" as per Section 2(17) of the VAT Act. Reference was also made to Rule 2(g) of the VAT Rules which p....
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....ned the amount in the refund column and any refund application is filed and in absence of such application filed by the petitioner to carry out the assessment proceedings, the respondent No. 2 has rightly not entertained the application of the petitioner to grant the refund by the impugned letter/order dated 05.03.2024 rejecting such application. 7.4. It was also pointed out that the application dated 26.10.2020 filed by the petitioner was never received by the respondent. Reliance was placed on the copy of the inward register. It was pointed out that the respondent received an application of the petitioner for the assessment on 29.03.2023 and thereafter, on 05.01.2024 with similar request and the same were replied by the respondent No. 2 vide impugned letter/order dated 05.03.2024. 7.5. It was submitted that the decisions relied upon by the petitioner are not applicable in the facts of the case because once the petitioner has migrated to the GST regime then any ITC claim of the VAT regime has to be to be processed in terms of Section 140 of the GST Act read with Rule 117 of the Central Goods and Service Tax Rules, 2017 (for short 'the CGST Rules') and as the petitioner is deemed....
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.... Section 2(36) of the VAT Act still exist and therefore, the tax period automatically continues in the GST regime and therefore, as per the provisions of Sections 139 to 142 of the GST Act, the petitioner was required to show the unutilised tax credit in Form GST-TRAN-1 so as to see that the same is carried forward in the electronic credit ledger as per the provisions of the GST Act. 7.9. Learned AGP Mr. Raj Tanna submitted that once the petitioner is migrated under the GST regime in terms of Section 139 of the GST Act, then the condition and time limit of Section 140 of the GST Act read with Rule 117 of the GST Rules are mandatorily applicable and even if the petitioner has filed Form GST- TRAN-1 with NIL amount, the petitioner is bound by the decision of the Hon'ble Apex Court in case of Union of India versus Filco Trade Private Limited dated September 2,2022 in Miscellaneous Application Nos. 1545-1546/2022 in SLP(C)No. 32709-32710/2018, whereby time to file Form GST-Tran-1 was extended but the petitioner has failed to file a revised GST-TRAN-1. 7.10. It was therefore submitted that in view of the undisputed fact that the petitioner did not show the unadjusted unutilised tax cr....
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.... this Court in case of Willowood Chemicals Private Limited versus Union of India reported in (2018) 98 taxmann.com 100 (Gujarat), decision of the Hon'ble Bombay High Court in case of JCB India Limited versus Union of India reported in (2018) 92 taxmann.com 131 (Bombay) as well as the decision of the Hon'ble Madras High Court in case of P.R. Mani Electronics Versus Union of India reported in (2020) 117 taxmann.com 868 (Madras) in which it was held that the ITC is a Concession and not a Vested/ Indefeasible/Constitutional Right and therefore, the claim cannot be for indefinite period and for lapsing of the credit, strict adherence to time limit, an application for refund has to be in existence. 7.16. It was therefore submitted that the reliance placed by the petitioner on provisions of Section 174(2)(c) of the GST Act being a saving clause cannot lead to an endless litigation if transitional provisions are not adhered to by the petitioner. It was therefore submitted that the petitioner is not entitled to the refund in absence of failure of the petitioner to disclose unadjusted unutilised tax credit in Form GST-TRAN-1. 7.17. Reliance was placed on the decision of the Patna High Cour....
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....is not in dispute and the petitioner has also discharged output tax liability for the month of July, 2017 and has not transferred any credit in the GST regime otherwise the petitioner would have excess the credit in the electronic credit ledger as on 1st July, 2017. 8.3. It was submitted that the petitioner has also filed an additional affidavit dated 19.12.2024 which is supported by the Certificate of the Chartered Accountant to demonstrate that the petitioner has not carried forward the unadjusted unutilised tax credit in the GST regime. Learned advocate Mr. Kuntal Parikh has also invited the attention of the Court to the screenshot of the GST Portal to show that the petitioner has not filed Form GST-TRAN-1 which is certified by the Chartered Accountant in the Certificate. It was therefore submitted that the reliance placed by the respondent on the various judgments are not applicable to the facts of the case because in none of the case it has been held that filing of Form GST-TRAN-1 is mandatory. 8.4. It was further submitted that reliance placed by the respondent on of Section 174(2)(c) of the GST Act to deny the refund of unutilised tax credit under VAT Act, but the provisio....
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....bruary 2011 accepting the facts and figures as per annual return and VAT audit report. In August 2013, flying squad issued notice in Form 401 seeking details of amount collected towards maintenance of fly ash collection system. The petitioners voluntarily deposited the amount towards tax and interest on administrative charges collected for maintaining fly ash collection system under protest for FY 2006-2007 to 2010-2011 for five years. It was conveyed to the petitioners by the flying squad that the jurisdictional ward office would pass the necessary orders in this regard. The petitioners received notices for revision of assessment orders for the financial years 2007-2008 and 2008-2009. Reassessment proceedings for financial year 2009-2010 were completed covering the fly ash related transactions, whereas the transactions for the financial year 2010-2011 were covered under regular assessment order passed under section 34 of the GVAT Act. The petitioners therefore, submitted that no action was initiated so far by the department to adjudicate the matter pursuant to the amount collected for the year 2006-2007. The petitioners also submitted that the time limit for passing the order fo....
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....ition. As the amount is paid neither by way of self assessment or pursuant to any demand, it is always open for the petitioners to bring it to the notice of the authorities concerned and claim the refund of amount of such deposit. The authority concerned is also duty bound to refund such amount as retention of such amount would be hit by Article 265 of the Constitution which mandates that no tax shall be levied or collected except by authority of law. Since the amount is deposited under protest by the petitioners and no order of assessment, reassessment or revision is passed till date, the amount retained by the authority is not backed by any authority of law in the light of Article 265 of the Constitution of India and, therefore, the respondents have no authority to retain the same." 12. In order to arrive at the above conclusion, the provisions of the VAT Act and various decisions have been analysed as under : "13. On perusal of the documents produced on record, there is nothing to show that any reassessment order under section 35 of GVAT Act or any revision order under section 75 of the GVAT Act has been passed by the respondent VAT authorities. The petitioners have deposited....
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....t the amount deposited as a condition precedent does not bear the character of duty but bears the character only of a security deposit being a condition precedent for hearing of the appeal. The court therefore, held that assuming for the sake of argument that the provisions of section 39 of the GVAT Act are applicable to the facts of the present case, there is nothing to show that the commissioner has withheld the amount deposited by the respondent in exercise of powers under section 39 of the GVAT Act after recording satisfaction as envisaged therein. The court thereafter placed reliance on decision of Bombay High Court in case of Suvidhe Ltd. v. Union of India reported in 1996 (82) ELT 177 (Bom.), wherein it was held that a deposit under section 35F of the Central Excise Act, 1994 is not a payment of duty but only a pre-deposit for availing the right of appeal. Such amount is bound to be refunded when the appeal is allowed with consequential reliefs. On the basis of same analogy, it was held that as the amount deposited by the assessee is in the nature of pre-deposit and not payment of tax under the provisions of the Sales Tax Act, the amount deposited by it is bound to be refund....
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....und as well as various provisions of the Central Sales Tax Act, 1944. The court relied upon the decision in case of U.P. Pollution Control Board v. Kanoria Industrial Ltd., reported in (2001) 2 SCC 549, wherein it is held that tax or money realised without the authority of law is bad under Article 265 of the Constitution and that the money or tax so collected is refundable. The court further relied upon the decision of Supreme Court in case of Salonah Tea Co. Ltd. v. Superintendent of Taxes, reported in (1988) 1 SCC 401, wherein it has been held thus : "14.4 Thus, in view of the principles enunciated by the Supreme Court in Salonah Tea Co. Ltd. v. Superintendent of Taxes, Nowgong (supra), in case where money is paid by mistake, the period of limitation prescribed is three years from the date when the mistake was known. Besides, section 17 of the Limitation Act inter alia provides that when a suit or application is for relief from the consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake, or could, with reasonable diligence, have discovered it. Therefore, in case where money is paid under a mistake, t....
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....to be considered as to whether the petitioner who has admittedly not carried forward the unadjusted unutilised tax credit under the GST regime is entitled to refund of such tax credit or not under the VAT Act in view of the provisions of Section 174(2)(c) of the GST Act. 16. In the facts of the case, the petitioner has not been able to claim set-off of the unadjusted unutilised tax credit under the VAT Act in absence of next tax period. The next tax period does not exist in view of the coming into force of the GST Act from 01.07.2017. Therefore, the provisions of Section 2(28) which defines the "tax period" and provisions of Section 2(36) which defines the "year" would be inapplicable in the facts of the case as there is no tax period or year vis-a-vis the provisions of the VAT Act which has been repealed by the provisions of Section 174(1) of the GST Act. 17. In view of the above undisputed facts, it would therefore be germane to refer to and rely upon the provisions of Section 34 of the VAT Act which provides for audit assessment. Sub-section (1) of Section 34 stipulates that subject to the provisions of Sub-section (2), the amount of tax dues from the registered dealer shall b....