In W.P. (T) No. 4572 of 2021-JHA HC- Jharkhand HC sets aside ex-parte revision order passed u/s 108 of Jharkhand Goods and Services Tax Act, 2017
Justices Aparesh Kumar Singh & Deepak Roshan [21-02-2023]

Read Order: Anvil Cables Pvt. Ltd v. The State of Jharkhand and Ors 

LE Correspondent

Chhattisgarh, March 6, 2023: The Jharkhand High Court has set aside an ex-parte revision order rejecting the TRAN-1 and directing the petitioner to refund excess ITC claimed amount along with penalty in a case where it was alleged that the Order was passed without considering the preliminary objection and without granting any opportunity of hearing.

The assessee had filed the petition before the Division Bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan seeking a direction upon the concerned respondent authority to allow the petitioner to avail/utilize its excess Tax Deducted at Source (in short TDS) Credit amounting to Rs 1,19, 41, 937.36 available as on June 30, 2017 i.e. Pre Goods and Services Tax regime.

The petitioner, engaged in the manufacturing and selling of aluminum cable and conductor, has been one of the main dealers of the Jharkhand Bijli Vitran Nigam Limited (for short JBVNL). The JBVNL while releasing the payment of the petitioner used to deduct tax under section 45 of the JVAT Act by way of advance recovery. 

Section 45 of JVAT Act deals with “Special Provision relating to Advance Recovery of Tax on Sales and Supplies to Governments and the other persons”, which include the Electricity Board. The said amount so deducted was liable for adjustment from the tax liability of the person from whose bills such deduction has been made. 

Accordingly, the petitioner used to take credit of tax deducted and paid from his bills and remaining, if any, was being carried forward to next period as Tax Deducted at Source (TDS).

In September 2017, the petitioner filed its quarterly return for the period April 1, 2017 to

June 30,2017.

As per column 57 of the aforesaid return the total TDSfor the aforesaid period was Rs.2,59,26,991/-. After being adjusted from the VAT payable during the period and other adjustment the balance amounting to Rs.1,24,68,378.36 was auto populated in column 61 of the Return being “Excess Input Tax Credit to be C/F to next period”.

On July 1, 2017, the GST Law was implemented, wherein section 140(1) of the JGST Act, 2017 makes every person entitled to take in his electronic credit ledger credit of the amount of Value Added Tax and Entry Tax, if any, carried forward in the return relating to the period ending June 30,2017.

In order to take credit of the aforesaid amount, the petitioner filed statutory form i.e., GST TRAN-1 migrating Rs.1,19,41,397 from VAT regime to GST regime. The TRAN-1 filed by the petitioner was duly accepted by the respondent-Department and the petitioner was allowed to carry forward the amount deducted toward TDS under JVAT Act.

However, after lapse 2½ years the petitioner was in receipt of a notice granting opportunity of hearing to the petitioner in a revisional proceeding initiated under section 108 of the JGST Act suo-moto by the Commissioner. 

Without considering the preliminary objection raised by the petitioner and ground mentioned therein and even without granting any opportunity of hearing, Joint Commissioner of State Tax (second Respondent)passed the Ex-Parte impugned order dated 30.07.2021 rejecting the TRAN-1 and directing the petitioner to refund excess ITC claimed amounting to Rs.1,19,41,937.86 along with penalty under section 73(9)@10% and interest @24%, total amounting Rs. 1,60,02,196.69.

The Bench referred to the judgment in W.P.(T) No. 2404 of 2020 wherein it was opined that proviso to section 140(1) of the JGST Act restricts the migration of credit, if the credit pertains to transactions which were prohibited under section 17(5) of the JGST Act in which no input tax credit is available. 

As per the Bench, since the issue involved in this case was squarely covered by the judgment passed by this Court in  M/s Subhash Singh Choudhry & other analogous matter, W.P.(T) No. 2404 of 2020, the impugned order passed in revision and Demand Notice had to be quashed and set aside. 

Allowing the application, the Bench held that the amount, if any, recovered or paid should be refunded or adjusted for future liabilities.