GST Update No 219 on no time limit prescribed for refund u/s 142(9)(b)

Introduction of GST is a significant reform in the indirect taxation in the country wherein multiple taxes were consolidated under a single umbrella and replaced with one nation one tax. Since there was consolidation of various taxes, it was necessary to have transitional provisions in the frame to ensure smooth and hassle-free flow from erstwhile regime to the existing regime. However, there had been plethora of cases related to transitional provision as prescribed under Section 142 of CGST Act, 2017 wherein the assesses are denied carrying forward the credit or claim refund thereof from the erstwhile GST regime. One of such case was reported before CESTAT Delhi in the case of Punjab National Bank V/s Commissioner, Central Goods and Service Tax, Central Excise. The decision imparted in this context is the subject matter of discussion of our present update.

The petitioner is a scheduled bank, paying service tax under banking and financial services for the period ended on 30.06.2017. The ST-3 return was filed as on 14.08.2017 and Tran-1 was filed for unutilised credit of Rs. 5,38,330/-on the same date. However, upon filing of the same, mistake was noticed regarding omission in claiming CENVAT credit of Rs. 1,18,237/- on account of late receipt of invoices related to input services to which revised ST-3 return for the period 30.06.2017 was filed on 21.09.2017. However, post GST implementation, the transfer of credit in TRAN-1 could not have been revised and taken to GST regime and hence, refund claim was applied on 15.11.2018 of Rs. 1,18,237/-. The refund claim was rejected being time barred. Further, it was argued that the assessee failed to produce any concrete evidence to prove that incidence of tax was not passed on to any other person.

The Counsel of petitioner quoted Section 142(9)(b) of CGST Act, 2017 and submitted that in case return is revised after introduction of GST regime but within the prescribed time limit under the law and refund arises after filing of TRAN-1, the amount shall be refunded back to the assessee. Furthermore, it was contended that there is no scope in the present case to pass on the liability under service tax provision. Therefore, it was prayed to allow the appeal.
The Counsel of respondent relied on the impugned order.
The CESTAT after analysing the situation held that there exists no controversy regarding the amount to be refunded back. Furthermore, it was held that there is no scope to transfer any service tax liability since the credit is taken after the introduction of GST regime and filing of TRAN-1. Moreover, it is stated that no time limit is prescribed under Section 142(9)(b) of CGST Act, 2017, for claiming of refund. Therefore, the appeal is allowed.
The above decision is a favouring decision in alignment with various settled cases that the credit legitimately earned cannot be denied merely because of procedural lapses. To illustrate in the case of Adfert Technologies Pvt. Ltd V/s Union of India, Punjab and Haryana High Court held that transitional credit being vested right cannot be taken away on procedural or technical ground. This decision was upheld by the Hon’ble Supreme Court as reported in2020 (34) GSTL J138 (SC). It is well settled law that the procedures cannot override the law since they are only a delegated legislation. The taxpayers can take shelter of these settled judicial pronouncements by the judicial authorities wherein the same viewpoint is upheld. It is high time that the revenue authorities should understand the intent of legislation otherwise the assessees will be left with no other choice other than approaching the court.

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GST Update No 219 on no time limit prescribed for refund u/s 142(9)(b)

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