Several amendments have been proposed in the GST Law in the Finance Bill which is a part of Union Budget announced for 2022-23. Amendments have been made in the provisions regarding filing of returns, availment of input tax credit, GST refunds etc. Some o

GST law was implemented with a motive of simplified and easy tax reform, and it was expected that it will provide a hassle-free refund process. However, taking refund from department is a herculean task as it is often observed that revenue authorities are reluctant to grant refunds to the assessees. Recently, the refund claim in the case of QUEST GLOBAL ENGINEERING SERVICES PRIVATE LIMITED was rejected on the grounds of limitation which was further challenged before the Hon’ble Madras High Court. The analysis of the judgment is the subject matter of discussion of our present update. The transferor company i.e. Quest Global Engineering Pvt. Ltd. got merged with the petitioner company. The transferor company had raised invoices during the month of June, July, August and September 2017 on their client M/s Caterpillar India Pvt. Ltd. and discharged the tax liability. The data of both the companies was integrated. Unfortunately, the system picked the same invoices on which service tax was paid by the transferor company and were reflected in the returns of those respective periods. Consequently, the petitioner ended up paying tax on those invoices without actually supplying the services for which refund claim was filed by them. Reliance was placed on decision given in the case of TAMIL NADU NEWSPRINT AND PAPERS LIMITED VS CUS., C. EX. & S.T. SETT. COMM., CHENNAI, 2021 (377) E.L.T.59 (MAD). and Circular No. 26/26/2017-GST dated 29.12.2017 wherein it was held that excess tax paid by mistake to the government should be refunded back to the petitioner. The Counsel of the Department submitted that the petitioner neither filed any evidence to substantiate that tax was already paid for the period from June to Sept 2017 and nor produced any proof that ITC was not availed by M/s Caterpillar on the base of invoices raised. The counsel further submitted that as per Section 54 of CGST Act, 2017, since, tax was paid on 01.11.2017, refund should have been claimed within a period of 2 years by the petitioner. However, it was filed on 30.05.2020. Therefore, it is rejected on account of time barred. Further, reliance was placed on the decision of Apex Court in the case of MAFATLAL INDUSTRIES V/S UNION OF INDIA, wherein it was held that limitation period cannot be overlooked except in case of unconstitutional levy. The counsel of the department also placed reliance on following judicial pronouncements:- • Assistant Commissioner of S.T, Chennai Vs Nataraj and Venkat Associates, 2015 • Enmas Andritz Private Limited Vs CESTAT, Chennai, 2017 • Indian Oil Corporation Limited Vs Union of India, 2016 • Southern Surface Finishers Vs Assistant Commissioner of Central Excise, Muvattupuzha, 2019 • Shoppers Stop Limited Vs Commissioner of Customs (Exports), Chennai, 2018 • Commissioner of Customs (Exports), Chennai Vs BPL Limited, 2010 • Union of India Vs Kirloskar Pneumatic Company,1996 • State of Haryana Vs Hindustan Machine Tools Limited, 2015 The Hon’ble Court considered the arguments of both the sides. After analyzing the provisions of Section 54, it was held that the petitioner should have filed for refund claim before expiry of 2 years i.e. before 19.12.2019. Therefore, refund claim is time barred. In case of wrong entry, petitioner should have taken appropriate steps to rectify the returns u/s 39. It was further stated that the circular submitted by petitioner’s counsel is not applicable in current scenario since supply is not reported twice instead invoice is generated twice by the petitioner. Rather, petitioner should have issued appropriate credit notes to the client to neutralize the excess payment of GST. The petition was dismissed without awarding any consequential benefits. The denial of refund claim on the grounds of limitation in cases where tax was mistakenly paid twice by the assessee is unjustifiable as it is settled principle of law that government cannot retain any tax without authority of law. As the tax cannot be levied on the same transaction twice, the tax paid inadvertently should be refunded back to the assessee without considering the time limit as in that case, what is refunded back is the amount paid in excess and not tax. The tax paid twice by the assessee does not partake the character of tax and so the limitation should not apply. There have been various judicial pronouncements in the erstwhile regime that the period of limitation is not applicable for refund of tax mistakenly paid by the assessee and so the benefit of the said decisions should have been granted in the present case. Reference may be made to the following cases:- • M/S BINANI CEMENT LTD. VERSUS UNION OF INDIA [2013 (288) E.L.T. 193 (GUJ)] • JOSHI TECHNOLOGY INTERNATIONAL VERSUS UNION OF INDIA [2016 (339) E.L.T. 21 (GUJ.)] • 3E INFOTECH LTD. VS. CESTAT [2018(18) GSTL 410 (MAD.)]

Comments

Several amendments have been proposed in the GST Law in the Finance Bill which is a part of Union Budget announced for 2022-23. Amendments have been made in the provisions regarding filing of returns, availment of input tax credit, GST refunds etc. Some o

Post a Comment

Query