The Tripura High Court has upheld the order rejecting the refund claim of unutilized Input Tax Credit (ITC).
The bench of Chief Justice Aparesh Kumar Singh and Justice Biswajit Palit has observed that the claim for refund is not made out in terms of Section 54(3) of the CGST Act as none of the enumerated conditions are made out. Petitioner under a misconception of law has sought refund of the accumulated ITC in its electronic credit ledger when there has been no duplication of payment of tax for any tax period. It is up to the petitioner to utilize the unutilized ITC for future tax liabilities.
The bench noted that the blocking and unblocking of ITC by the SGST authorities between 20.03.2021 and 07.07.2021 were not subject matter of any litigation where the issue of legality or correctness of such blocking was determined. Petitioner by making payment of tax dues through electronic cash ledger for the tax period March, 2021 had duly discharged his output tax liability as the input tax had already been deposited by his purchaser.
The bench stated that the accumulated ITC in his electronic credit ledger in lieu thereof could well be utilized for future tax liability. However petitioner has not been undertaking business since March, 2021 as stated by learned counsel for the petitioner. Therefore the accumulated ITC remains in his electronic credit ledger. The claim for refund is not made out in terms of Section 54(3) of the CGST Act as none of the enumerated conditions are made out.
The petitioner/assessee is a registered taxpayer under the Goods & Services Tax Department. During the tax period March, 2021, his electronic credit ledger was blocked on 20.03.2021 by the SGST authorities. A notice in GST ASMT-10 was issued upon him on 20.03.2021 after scrutiny of his returns by the SGST authorities.
After escalating the matter with the SGST authorities, the department finally unblocked the credit on 07.07.2021. Meanwhile to discharge the output tax liability, petitioner made payment of the tax dues for the period March, 2021 while filing GSTR-3B returns through electronic cash ledger.
Since the input tax credit accumulated in the electronic credit ledger for the period could not be utilized, petitioner sought refund in Form-GST-RFD-01 filed in the GSTN portal on 14.07.2021 under the “Others” category.
Petitioner received an acknowledgment in Form-GST-RFD-02 issued by the Assistant Commissioner, CGST on 18.08.2021 [Annexure-10]. A show cause notice in Form-GST-RFD-08 was issued on 10.09.2021 by the Assistant Commissioner directing him to file a reply as to why the amount of refund claimed should not be rejected since there is no provision in law to refund the tax amount paid against the liability.
Petitioner filed its detailed response in Form-GST-RFD-09 on 16.09.2021 submitting that the refund application has been correctly filed by the company and should not be rejected on the ground.
The petitioner contended that petitioner has not been able to undertake business after March, 2021 as no such contracts have been awarded to him by the State or Central government. Petitioner is essentially engaged in the business of erection of transmission lines. Though petitioner has been participating in the NITs floated by different governments and has continued with the GST registration which is an essential requirement for participation in such NITs, but has been filing nil returns because of absence of any business. However, his unutilized ITC remains in the electronic credit ledger which ought to have been refunded as there are no output tax liability due against him.
Therefore, the assessee contended that the order may be set aside and the amount of Rs.78,20,202/- may be refunded with interest in his favour since it is lying in the electronic credit ledger since March, 2021.
The court while dismissing the petition held that it is up to the petitioner to utilize the unutilized ITC for future tax liabilities.
Case Details
Case Title: M/s Sterlite Power Transmission Ltd. Versus The Additional Commissioner (Appeals), CGST
Case No.: WP(C) No.446 of 2023
Date: 12/12/2024
Counsel For Petitioner: Anil Kr. Bezawada
Counsel For Respondent: Bidyut Majumder
