AVT McCormick Ingredients Pvt. Ltd. Vs Union of India (Kerala High Court)
Summary: The Kerala High Court dismissed the writ petition filed by AVT McCormick Ingredients Pvt. Ltd. challenging an assessment order dated 15.10.2018 to the extent it disallowed refund of input tax credit lying in the Electronic Credit Ledger under the head SGST credit. The petitioner, engaged in export of spice extracts and oleoresins, was earlier registered under the Kerala Value Added Tax Act, 2003 and had filed Form GST TRAN-1 for transitioning excess input tax credit from its VAT ledger to its Electronic Credit Ledger. According to the petitioner, TRAN-1 was filed in November 2017 and the transitional credit was reflected in the Electronic Credit Ledger on 27.12.2017.
For November 2017, the petitioner sought refund of ITC. The Department rejected the claim on the ground that transitional credit was not credit earned during the relevant period and therefore did not qualify as “Net ITC” under Rule 89(4) of the CGST Rules, 2017, as clarified by Circular No.37/11/2018-GST dated 15.03.2018. The respondents also objected to maintainability of the writ petition because the petitioner had not exhausted the statutory remedy and had approached the High Court after expiry of the limitation period for appeal.
