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2024 Supreme(Guj) 2183
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, D.N. RAY, JJ.
M/S. FORD INDIA PVT. LTD. – Petitioner
Versus
UNION OF INDIA – Respondent
Special Civil Application Nos. 19453, 19488 of 2021
Decided On : 22-10-2024
Advocate Appeared:
For the Petitioner: ANAND NAINAWATI
For the Respondents: ANKIT SHAH, NIKUNT K. RAVAL
Important Points
Subject
Taxation Law - Goods and Services Tax
Act Referred
CENTRAL GOODS AND SERVICES TAX RULES : R.117, R.86(3), R.89(4), R.89(5)
INTEGRATED GOODS AND SERVICES TAX ACT : S.16, S.16(3)
Headnote
(B) Refund Claims - The petitioner’s claim for refund of accumulated ITC was justified as per provisions of the CGST Act, and the authorities' hyper-technical approach was rejected. (Paras 7.1, 9, 10)
Facts of the case:
The petitioner, engaged in manufacturing and exporting passenger cars, claimed refund of unutilized ITC under the GST regime after transitioning from the Central Excise Act. The refund was initially sanctioned but later challenged by the authorities.
Findings of Court:
The court found that the petitioner was entitled to the refund based on the transitional CENVAT credit carried forward as per GST Form TRAN-1.
Issues: The main issue was whether the transitional credit could be utilized for refund claims under the CGST Act.
Ratio Decidendi: The court ruled that the transitional credit should be considered as an opening balance in the electronic credit ledger as of 01.07.2017, allowing the petitioner to claim the refund.
Result: Petitions allowed, and the impugned orders were quashed.
JUDGMENT :
BHARGAV D. KARIA, J.
1. Heard learned advocate Mr. Anand Nainawati for the petitioner and learned advocate Mr. Nikunt K. Raval for the respondents.
2. Rule, returnable forthwith. Learned advocate Mr. Nikunt Raval waives service of notice of rule for and on behalf of the respondents.
3. Having regard to the controversy in narrow compass, with the consent of the learned advocates for the respective parties, the matters are taken up for hearing.
4. Both the petitions are raising common issue and hence, the same are disposed of by this common Judgment and Order.
5. The petitioner has prayed to quash and set aside the Orders-in-Appeal dated 19th February, 2019 passed by the Commissioner (Appeals), CGST & CE, Ahmedabad and the consequential Order-in-Original dated 29th April, 2021 passed by the Additional Commissioner, CGST & Central Excise, Ahemdabad-North and show-cause notice dated 15.10.2020 for giving effect to the Order-in- Appeal.
6. The brief facts of the case are as under.
6.1. The petitioner is engaged in business of manufacture and supply of passenger cars, parts, components and engines thereof. The petitioner also exports goods without payment of Integrated Goods and Services Tax (for short ‘the IGST’) under the Letter of Undertaking (for short ‘the LUT’) in terms of Section 16 of the Integrated Goods and Services Tax Act, 2017 (for short ‘the IGST Act’).
6.2. It is the case of the petitioner that prior to the coming into force the Goods and Service Tax regime, the petitioner was registered under the provisions of the Central Excise Act, 1944 and was discharging appropriate central excise duty on clearance of final products from its factory premises. For use in the manufacture of final products, the petitioner was procuring various inputs and input services with respect to which, the petitioner availed the Central Value Added Tax Credit (for short ‘the CENVAT Credit’) in terms of Central Value Added Tax Credit Rules, 2004.
6.3. Comming into force of the Central Goods and Services Tax Act, 2017 (for short ‘the CGST Act’) with effect from 1st July, 2017, the petitioner was entitled to carry forward the CENVAT Credit of Rs.1,63,15,92,468/- into the GST regime in accordance with Section 140 of the CGST Act read with Rule 117 of the Central Goods and Services Tax Rules, 2017 (for short ‘the CGST Rules’) by filing Form GST TRAN-1 declaration. The petitioner had supplied passenger cars, parts, components and engines to the customers located in India and abroad during the relevant period from July, 2017 to September, 2017 and received various inputs and input services by way of Input Tax Credit (for short ‘the ITC’). The petitioner also filed requisite return in Form GSTR-3B during the relevant period.
6.4. The petitioner availed the ITC for payment of the GST for three months’ period i.e. from July, 2017 to September, 2017 as under:
| Period | ITC availed | Credit Utilized | ||||
| IGST | CGST | SGST | IGST | CGST | SGST | |
| July 2017 | 1,36,86,453 | 1,82,82,318 | 1,82,82,318 | 1,36,86,453 towards IGST | 2,19,38,492 towards CGST and 64,68,10,149 towards IGST | 1,82,82,3 18 towards SGST |
| August, 2017 | 39,81,78,094 | 10,99,67,378 | 10,99,67,378 | 39,81,78,094 towards IGST 1,79,83,468 towards | CGST and 1,29,12,051 towards IGST | 1,79,83,4 68 towards SGST |
| September, 2017 | 76,58,08,834 | 30,18,80,220 | 30,18,80,220 | 47,11,71,982 towards IGST | 3,63,40,644 towards CGST | 3,63,40,6 44 towards SGST |
6.5. For the month of July, 2017, the petitioner had completely utilised the IGST and State GST Credit availed for payment of tax, however, with respect to payment of Central GST liability through available ITC, the petitioner discharged it by utilising available transitional credit.
6.6. For the month of August, 2017, the petitioner completely utilised the IGST Credit availed in the said month for payment of tax and with respect to CGST and SGST liability, the same was discharged through utilisation of ITC pertaining to CGST and S
