TaxTMI 
TaxTMI 
2025 (6) TMI 1840
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....rat Value Added Tax Act, 2003 (for short 'the VAT Act'). The petitioners 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 TR....
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....d, which unless replaced by a final certificate of registration under sub-section (2), shall be liable to be 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 t....
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....ugh a notification shall not continue as privilege if the said notification is rescinded on or after the appointed day; or (d) affect any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment 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....
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....s and by levying the appropriate rate of tax as if the sales or purchases were taxable. (3) Where,-- (a) a dealer has furnished all the returns, revised returns, if any, and annual returns by the date prescribed therefor and paid the amount of tax due according to such returns, and (b) the Commissioner is satisfied that the returns or, as the case may be, 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: ....
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....is Act or the earlier laws and shall then refund only the balance amount, if any: Provided further that no such adjustment under the proviso shall be made towards a recovery of an amount due that has been stayed by an appellate authority Rule 15 of the VAT Rules : 15. Calculation of tax credit under section 11. xxxxxx (6) Where the tax credit (other than tax credit on capital goods) admissible in the year remains unadjusted against the output tax as per section 11, such amount 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 ....
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....Learned advocate Mr. Kuntal Parikh therefore submitted that there is no dispute with regard to the input tax credit which has remained unadjusted to get the refund under the provisions of the VAT Act and the Rules. In support of his submissions, reliance was placed on the decision of the Eicher Motor Limited Versus Union of India reported in (1992) 2 SCC 361 and Collector of Central Excise Versus Dai Ichi Karkaria Limited reported in (1999) 7 SCC 448. 6.4 It was thereafter contended by learned advocate Mr. Kuntal Parikh that the deeming provision is to be given full effect and where the 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 Swa....
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....under Section 34 of the VAT Act. 7.2. It was further submitted that the refund can be claimed in terms of Section 36 of the VAT Act mentioning the amount in refund column itself and in absence of such disclosure made by the petitioner in the self-assessment return, the petitioner is not entitled to the amount of refund on the ground that there was unadjusted input tax credit which could not be carried forward to the next tax period in view of the coming into force of the GST Act. 7.3. It was submitted that the respondent is required to generate audit task in the system if the petitioner had mentioned 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 ap....
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....refund which is mandatory requirement under the said provision and under the proviso to said Section which stipulates that no refund is to be granted under the same as carried forward in the GST Act. It was further submitted that as the VAT Act is repealed and as the definition of tax period as per the provisions of Section 2(28) of the VAT Act is also repealed and in absence of no further tax period, the submission made on behalf of the petitioner is without any basis and as per the amendment to VAT Act in 2017, the definition of "tax period" as per Section 2(28) of the VAT Act and the definition of "year" under 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....
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....ntioned in Rule 15(6) of the VAT Rules. 7.14. It was further submitted that the provisions of Section 174(2)(c) of the GST Act would also not be applicable as ITC is not a vested right and as such, no right can be said to have been accrued in favour of the petitioner as per the Rule 15(6) of the VAT Rules in terms of Section 174(2)(a) of the GST Act which cannot revive anything which was not in force and hence, admittedly, in absence of any application for refund filed by the petitioner, the same cannot be now granted by the respondent-Authority. 7.15. In support of his submissions, reliance was placed on the decision of 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....
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.... with any of the goods on which the VAT Act continues even after 1st July, 2017 and in such circumstances, the contention of the respondent that term "tax period" has not been deleted from VAT Act even after 01.07.2017 and therefore, the petitioner cannot claim refund and it has to carry forward the ITC to next tax period as shown in his quarterly return, is without any basis and such interpretation of the law would not be applicable in the facts of the case of the petitioner. 8.2. It was further submitted that the petitioner has not filed Form GST-TRAN-1 for carry forward of excess unutilised unadjusted credit under the GST Act which 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. Learn....
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....18 more particularly, for the quarter 1st April, 2017 to 30th June, 2017 under Sub-section (2) of Section 34 of the VAT Act and therefore there is a deemed assessment so far as the return in VAT Form 201 filed by the petitioner is concerned. 11. This Court, in the case of Torrent Power Limited and Another Versus State of Gujarat and Another rendered on 15.04.2019 in Special Civil Application No. 16211 of 2018 in similar situation has held as under : "18. In the present case, the petitioners have made an application for refund for the first time on 11.8.2015 wherein it was stated that the assessment for the year 2006-2007 under section 34 of the GVAT Act was completed in February 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 jur....
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....nt authorities have no jurisdiction to grant such refund and, therefore, only remedy available to the petitioners is by way of filing the petition under Article 226 of the Constitution as the amount paid by way of deposit is neither a duty or tax to which the provisions of the GVAT Act would be applicable and as a consequence, the machinery provision under the GVAT Act would not apply to refund of such amount. 20. In the light of the above discussion, when the petitioners have deposited the amount of Rs. 46,43,174/- under protest for which no adjudication order is passed by the authorities, such claim being outside the purview of enactment can be made either by way of a suit or by way of writ petition. 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 ....
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.... is in the nature of deposit and not tax, allowed the petition by directing the respondents to refund the said amount with simple interest at the rate of 7% per annum. Similarly in case of Essar Steel Ltd.(supra), this court in facts of the said case, after analysing the provisions of sections 36 to 39 of the GVAT Act with regard to grant of refund, has held that though the expression "refund" may also be used for returning the amount of pre-deposit, there is a clear distinction between the character of the amount paid by way of tax and by way of pre-deposit pending the appeal. The court was in agreement with the view taken by the Bombay High Court in case of Nelco Ltd. v. Union of India reported in 2002 (144) ELT 56 that 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 po....
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....g refund along with interest to the petitioner of that case where the petitioner was not liable to pay education cess and secondary and higher secondary education cess on the petroleum/crude oil under the provisions of section 15 of the Oil Industry (Development) Act, 1974 pursuant to circular dated 7.1.2014 issued by Central Board of Direct Taxes clarifying that the education cess and secondary and higher secondary education cess are not to be calculated on cesses which are levied under the Acts administered by the department/ministries other than ministry of finance, department of revenue in terms of those Acts. This court considered the question of maintainability of petition under Article 226 of the Constitution of India for grant of refund 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 S....
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.... CENVAT credit or eligible duties carried forward in return relating to the period ending on 30th June, 2017. However, on perusal of the provision, it appears that it is not mandatory for the assessee to carry forward the CENVAT credit or eligible duties in the return filed under the various Acts. 15. Section 174 of the GST Act provides for repeal and savings. Sub-section (2) of the said Act provides for savings under the various Acts which were repealed by Sub-section (1) of the GST Act. Clause (c) of the Sub-section (2) provides that the repeal of the said Acts shall not affect any right, privilege, obligation or liability acquired or accrued or incurred under the amended Acts or the repealed Acts or orders under such repealed or amended Acts. Therefore, it is required 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....
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....(6) of the VAT Rules as well as the proviso thereto, and applying the same to the facts of the case, it is not in dispute that the petitioner has shown the amount of the credit to be carried forward in the next tax period and has not carried forward in Form GST-TRAN-1 and it is also not in dispute that the petitioner has discharged the liability under the GST Act for the month of July, 2017 onward and as no GST-TRAN-1 Form was filed by the petitioner, there is no credit in the electronic credit ledger of the petitioner vis-a-vis the credit which was shown to be carried forward in the next tax period in the VAT return filed in VAT Form 201. Therefore, as a natural corollary, the petitioner has been able to prove that the goods upon which such credit was shown to be carried forward to next tax period have been disposed of as per the provision of Sub-section (3) of Section 11 of the VAT Act and therefore, there is a compliance of the proviso to Rule 15(6) of the VAT Rules. It is therefore, incumbent upon the respondent No. 2 to sanction the refund of Rs. 3,90,762/- which has remained unadjusted unutilised tax credit as on 30th June, 2017 in the VAT return of the petitioner. 19. The....