TaxTMI 
TaxTMI 
2022 (9) TMI 1670
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....Annexure-D) of the Petitioner attempted to be filed for the month of June 2017 manually; b) That pending the hearing and final disposal of this Writ Petition, this Hon'ble Court be pleased to restrain the Respondents from adjudicating the impugned Show Cause Notice No. VI/1b-370/IA/AP-37/ C-VI/20-21 dated 18.11.2021 (Annexure L); c) interim and ad-interim relief in terms of prayer clauses (b) above; d) for costs of the Petition and orders thereon; and e) for such further and other reliefs, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case." 5. Brief facts of the case are that the petitioner is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in manufacture and supply of machines and mechanical appliances used in pharmaceutical packaging lines under the HSN code of 8479. The petitioner is providing services and paying service tax for maintenance service under forward charge and paying service for specified services under reverse charge basis. The petitioner was earlier registered under the Central Excise Act, 1944 and under Finance Act, 1994 for service ta....
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....ctronically. The petitioner however, attempted to revise the return till 25.07.2017. 5.6) It is the case of the petitioner that since the Excise return for the month of June 2017 was not revised electronically due to technical glitch and the last date for filing revised return was on 31.07.2017 in terms of Rule 12(8) of the Central Excise Rules, the petitioner vide letter dated 29.07.2017 requested respondent no.4 to amend the Excise return manually. All the details along with the revised closing balance of CENVAT Credit of Rs. 16,43,117/- was manually submitted to the respondent no.4 vide the said letter dated 29.07.2017 on 08.08.2017 and the petitioner requested to amend the said portion in the Excise return manually. 5.7) It is the case of the petitioner that with effect from 01.07.2017, a host of indirect taxes, including Excise duty, Service tax and Value Added Tax, had been replaced with GST. One of the key features of GST is seamless flow of Input Tax Credit to avoid cascading of taxes. In order to maintain a seamless flow of Credit, the provisions under the CGST Act prescribe the transitional arrangement for carry forward and availment of Credit of eligible indir....
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....ade claim of ITC for an amount of Rs. 16,43,117/- in their GST return filed for the month of July 2017. However, the same was reversed by the petitioner voluntarily on 23.04.2020. 5.12) It is the case of the petitioner that since the petitioner had adequate balance of Rs. 16,43,117/- in their Electronic Credit Ledger from the period of date of inadvertent amount claimed while filling GST return for the between July 2017 to 23.04.2020, the petitioner had not paid interest on the said amount as the net liability was Nil. 5.13) In the 39th GST Council meeting held on March 14th 2020, GST Council Meeting declared that the interest on delayed GST payments would be applicable only on net tax liability i.e. after the deduction of the available input tax credits. The interest on a delayed GST payment will no longer be charged based on the gross tax liability. This change will be applicable retrospectively with effect from 1st July, 2017, the date on which GST legislation came into force. Accordingly, Section 50 was proposed to be amended through Section 103 of the Finance Bill, 2021. Further in the 45th GST Council meeting, the Council had held that interest on net basis wo....
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....t furnished due to technical glitch of the portal. The Petitioner, therefore, vide letter dated 29.07.2017 furnished the revised excise return to the respondent No. 4. But no communication was received from the respondent No. 4 against the said letter. The petitioner again vide letters dated 26.03.2018 and 13.08.2018 addressed to respondent No. 2 & 4 explained the facts of the case and again requested to consider the revised Excise return and allow the transitional credit and it was therefore, submitted that the respondents are duty bound to revise the Excise return of the petitioner. 6.1) It was submitted that the petitioner approached respondent Nos. 2 and 4 numerous times for accepting revision of the Excise return for the month of June 2017, however, the respondent has not taken any decision on the revised return filed by the petitioner and failed to allow CENVAT Credit as per the provisions of the Central Excise regime. 6.2) Reliance was placed on the decision in case of Everyday Health (India) Pvt. Ltd. Vs. Commissioner of CGST & CE Mumbai East reported in [2018 (10) TMI 1077 - CESTAT Mumbai] wherein it is held that since the revised ST-3 returns wer....
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....ax Credit under the CGST Act; b) The registered person should have furnished all the returns required under the erstwhile law for the period of six months Immediately preceding the appointed date; and c) The Credit should not relate to goods manufactured and cleared under any exemption notification. 6.6) It was submitted that in the present case, there is no dispute as regards fulfillment of the afore-stated conditions. The respondents recognizes and acknowledges the fact that the revised Excise return has been filed by the petitioner, although the same has been done manually. 6.7) Learned advocate Mr. Modh submitted that the respondents ought to have appreciated that the Excise return was uploaded on 08.07.2017 but rejected due to some system error. It was again filed on 12.07.2017 and accepted on 15.07.2017, therefore, it was submitted that the original Excise return was filed within the due date. It was submitted that the petitioner subsequently filed the revised return manually within time limit as prescribed under Rule 12(8)(a) of the Excise Rules. 6.8) It was submitted that the petitioner has fulfilled all the conditions of Section 140(1) for carryi....
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....ed on the decisions of Bharat Heavy Electricals Limited vs. Commissioner of Central Excise, Bhopal reported in [2016 (332) E.L.T. 411 (M.P.)] and Commissioner of Central Excise vs. Home Ashok Leyland Ltd. reported in [2001 (134) ELT 647 (Mad.)] wherein it is held that in the situation where the substantive rules for availment of Credit have been fulfilled, the vested right over the credit cannot be restricted merely because a procedural requirement has not been fulfilled. 6.14) It was further submitted that the transitional credit proposed to be denied to the petitioner due to non-filing of revised Excise return electronically relates to the eligible taxes already paid by the petitioner on procurement of goods and services under the erstwhile tax regime. It was submitted that the Hon'ble Supreme Court in the case of Eicher Motors vs. Union of India reported in [1999 (106) ELT 3 (SC)] has held that the right to credit accrues in favour of the assessee on the date when the taxes on the raw materials or the inputs are paid and that right crystallizes when the goods are received in the factory of the assessee. It was further submitted that the Hon'ble Supreme Court in the ca....
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.... the High Court of Delhi in case of Lease Plan India Pvt. Ltd. vs. Govt. of National Capital Territory of Delhi and Ors. in W.P. (C) No. 3309/2019 and in case of Krish Automotors Pvt. Ltd. vs. Union of India and Ors. reported in [2019 (9) TMI 817 - Delhi]. 6.16) It was therefore, submitted that the High Courts have allowed the Writ Petitions of the aggrieved parties in cases where Form GST TRAN - 1 was not filed at all for whatsoever reasons. Whereas, in the present case even though the petitioner has rightly carried forward the eligible transitional Credit in Form GST TRAN - 1, proposed denial of the same by the respondents is completely unreasonable and unjustified and the actions of the respondent seeks to divest the petitioner of its vested rights in the said transitional Credit which cannot be permitted to sustain. 6.17) It was submitted that as per Section 174(2)(c) of the CGST Act, the omission of Excise Act (except in relation to goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution) shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed Excise Act. It was submitted that t....
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....NVAT Credit available in the CENVAT Credit account and mere non-disclosure of CENVAT Credit in the original Excise return is only a procedural requirement and would not disentitle the petitioner for refund. In this regard, reliance is placed on the decision of the Tribunal in the case of Serco Global Services Pvt. Ltd. vs. CCEx, Delhi-III [(2015) 39 STR 892 (Tri. - Del.)] wherein it is held that refund to be granted on the basis of closing balance of CENVAT Credit available in the CENVAT Credit account and not on the basis of closing balance of CENVAT Credit shown in the return. It was therefore, submitted that without prejudice to the other submissions, the petitioner should be granted the refund of closing balance of CENVAT Credit as appearing in the CENVAT Credit account of the petitioner. 6.20) Learned advocate Mr. Modh submitted that the purported action of respondents to not allow the transitional credit to the petitioner is arbitrary and hence violative to Article 14 of the Constitution of India. Furthermore, it was submitted that respondents by disallowing the carried forward CENVAT Credit would severely dent the working capital of the petitioner and thereby diminish its....
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....onic Ledger. It was submitted that the petitioner has not paid the interest on the delayed reversal of the wrongly availed Input Tax Credit and therefore, the petitioner is liable to pay interest. 7.2) Learned advocate Mr. Sharma relied upon Section 140(1) of the CGST Act which provides for transitional arrangement for availing input tax credit available with the supplier under any existing law before the appointed day and also relied upon Rule 117 of the CGST Rules and Rule 117 of the GST Rules which envisages the procedure to be followed by the supplier for availing the input tax credit. 7.3) Relying upon such provisions of law, it was submitted that the supplier would not be entitled to avail the input tax credit of Rs. 16,43,117/- as they had no balance of Cenvat Credit in their ER1/ST3 returns as on 30.06.2017 and there is contravention of provisions of Section 140(1) of the Act as the petitioner has wrongly carried forward input tax credit which was not in the balance as on 30.06.2017. 7.4) It was further submitted that the Cenvat Credit of Rs, 16,43,117/- wrongly carried forward by the supplier and utilised by them is to be demanded and recovered under the prov....
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.... said that there was a wrong carry forward of transitional credit of Rs. 16,43,117/- by the petitioner so as to recover such transitional credit from the petitioner. 11. The Bombay High Court in case of Tata Projects Ltd. vs. Deputy Commissioner of Income Tax (supra) has held that wherein the Income Tax department was unable to process the online returns of the assessee due to technical glitches, the department ought to have processed the returns manually to avoid any undue hardship to the assessee. 12. Similarly, in case of Shapoorji Pallonji & Co. vs. Deputy Commissioner of Income Tax 3(1) and another (supra), it was reiterated that where computer systems act as a hindrance for the department to discharge its statutory obligations, then alternative steps are required to be taken by the department to avoid any hardship to the assessee. 13. The petitioner is entitled to get the transitional credit as it is a right vested by statute and merely because the petitioner was unable to file GST TRAN - 1 by the due date i.e. 28.08.2017, it cannot be said that the entitlement of the credit of carry forward of eligible dues would vanish. 14. In view of the above, the attempt....