BMG Informatics Pvt Ltd. vs Union of India, Represented by the Secretary to the Govt. of India, Ministry of Finance, Department of Revenue

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Gau) 389

IN THE HIGH COURT OF GAUHATI (ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
ACHINTYA MALLA BUJOR BARUA, J.
BMG Informatics Pvt Ltd & Ors. - Petitioners
Versus
The Union of India, Represented by the Secretary to the Govt. of India, Ministry of Finance, Department of Revenue & Ors. - Respondents
WP(C) No. 3878 of 2021, WP(C) No. 3675 of 2021, WP(C) No. 3880 of 2021, WP(C) No. 4120 of 2021
Decided On : 02-09-2021

Advocates Appeared:
For the Petitioner: Mr. P. Baruah.
For the Respondent: SC, GST.

Headnote:
Central Goods and Service Tax Act 2017 - 54 (3) ,168(1) ,54,(3) ,11and 9 - Assessee BMG Informatics Pvt. Ltd is a company dealing with IT system integrator and is a service provider primarily engaged in sales and service of information and technology products to Government Departments, PSU and to other Research and Educational Institutes located in North Eastern region - Whether actual rate of tax on input supplies made by petitioner assessee is higher than actual rate of tax on output supplies made by them and depending upon satisfaction that may be arrived to pass a reasoned order on claim of petitioner assessee for refund - Whether tax rate on input supplies was higher than tax rate on output supplies, Joint Commissioner (Appeals) would direct a refund of unutilized input tax - From such point of view, even order of Joint Commissioner (Appeals) would be unsustainable in law – Held, Assistant Commissioner arrives at his satisfaction that actual rate of tax on input supplies made by petitioner assessee is higher than actual rate of tax on output supplies appropriate order for refund may be passed and on other hand, if Assistant Commissioner upon factual deliberation arrives at his satisfaction that actual rate of tax on input supplies was not higher than actual rate of tax on output supplies, again an appropriate order may be passed by giving reasons,Court have taken note of that circular -GST was issued in exercise of powers - As already noted, Section 168(1) of CGST Act of 2017 pertains to a situation where Central Board of Indirect Tax and Customs considers it necessary and expedient to do so for purpose of uniformity in implementing - . In other words, provisions of Section 168(1) can be invoked to bring in uniformity in implementation of CGST Act of 2017 - In instant case, when provisions of Section 54(3)(ii) of CGST Act of 2017 are unambiguous and explicitly clear in nature, there is no requirement of bringing in any uniformity in the implementation of the Act and the provisions of Section 54(3)(ii) would have to be applied in the manner it is provided in the Act itself - Requirement of passing the reasoned order by the Assistant Commissioner on the matter being remanded back be done within a period of six weeks from the date of receipt of a certified copy of this order - writ petitions disposed

JUDGMENT :

Heard Dr. A Saraf, learned senior counsel for the petitioner in WP(C) No.3878/2021 & WP(C) No.3880/2021. Also heard Mr. S.C. Keyal, learned counsel for the petitioners in WP(C) No.3675/2021 and WP(C) No.4120/2021.

2. It is taken note of that the petitioners in WP(C) No.3675/2021 and WP(C) No.4120/2021 i.e., the authorities under the GST Department are the respondents in WP(C) No.3878/2021 and WP(C) No.3880/2021, whereas the assessee BMG Informatics Pvt. Ltd., is the respondent in WP(C) No.3675/2021 and WP(C) No.4120/2021 and accordingly, the learned counsel representing the respective writ petitioners also represents the respondents in the corresponding writ petitions filed by the other.

3. For the sake of convenience, we refer the petitioner in WP(C) No.3878/2021 and WP(C) No.3880/2021 to be the assessee and the petitioners in WP(C) No.3675/2021 and WP(C) No.4120/2021 to be the department.

4. The assessee BMG Informatics Pvt. Ltd is a company dealing with IT system integrator and is a service provider primarily engaged in sales and service of information and technology products to Government Departments, PSU and to other Research and Educational Institutes located in the North Eastern region. The assessee is a registered dealer under the Central Goods and Service Tax Act 2017 (for short, the CGST Act of 2017) bearing registration No. GSTIN 18AADCB2203Q3ZL.

5. The assessee submitted a claim for a refund under FORM-GST-RFD-02.The said application was acknowledged vide Acknowledgement Number ZQ1802200360224 dated 28.02.2020. In response thereof, the department had issued a show-cause notice dated 10.04.2020 that the assessee had mis-declared the amount of total turnover in Annexure-1 to the RFD-01 for the period October - December 2018 and, therefore, the refund claimed is liable to be rejected.

6. The assessee submitted a reply dated 25.04.2020 showing their reasons as to why there was no mis-declaration. The Assistant Commissioner CGST, Central Excise and Customs, Guwahati (to be referred to as the Assistant Commissioner) in consideration of the claim of the assessee for the refund had passed the order dated 22.05.2020, whereby the claim for refund for an amount of Rs.3,92,594/- for the period from 01.10.2018 to 31.12.2018 stood rejected. The Assistant Commissioner while rejecting the claim of the assessee for the refund made under Section 54(3)(ii) of the CGST Act of 2017had arrived at the reasons for such rejection as stated in paragraph 6 thereof which is extracted as below:

“6. Section 54(3)(ii) of CGST Act, 2017 allows refund of accumulated ITC where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. However, the input and output being the same in the instant case though attracting different tax rates depending upon the class of buyer, does not get covered under the provisions of clause (ii) of sub-section (3) of section 54 of the act supra. This view is also supported by the clarificatory Circular No.135/05/2020-GST dated 31st March 2020 (para 3.2). Thus, the instant claim is liable for rejection on this score alone, as the amount of ITC claimed for refund was accumulated out of the trading activity where the input and output were the same.”

7. A reading of paragraph 6 of the order dated 22.05.2020 would go to show that the Assistant Commissioner had arrived at the conclusion that the input and output supplies in the instant case being the same, though it may attract a different tax rate depending upon the class of buyer would not be covered under the provisions of Section 54(3)(ii) of the CGST Act, 2017. In order to arrive at such conclusion, the Assistant Commissioner refers to paragraph 3.2 of the clarificatory circular No.135/05/2020-GST dated 31.03.2020.

8. In paragraph 5 of the order dated 22.05.2020, the Assistant Commissioner had taken note that the assessee BMG Informatics Pvt. Ltd is primarily engaged in sales and service of information and tec

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