Sterlite Power Transmission Ltd. Vs Additional Commissioner (Appeals) (Tripura High Court)
Conclusion: Refund for unutilized Input Tax Credit ( ITC ) could only be claimed under specific circumstances prescribed under Section 54, therefore, assessee was under a misconception of law had sought refund of the accumulated ITC in its electronic credit ledger when there had been no duplication of payment of tax for any tax period.
Held: Assessee was a registered taxpayer under GST. During the tax period March, 2021, his electronic credit ledger was blocked on 20.03.2021 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, assessee 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 said period could not be utilized, assessee sought refund in Form-GST-RFD-01 under the “Others” category vide Application Reference Number (ARN) AA160721000970M. Assessee received an acknowledgment in Form-GST-RFD-02 issued by the Assistant Commissioner, CGST. A show cause notice was issued by the Assistant Commissioner directing him to file a reply as to why the amount of refund claimed should not be rejected since there was no provision in law to refund the tax amount paid against the liability. Assessee, therefore, claimed refund of the amount equivalent to the tax liability paid through electric cash ledger. However, his claim was rejected on the ground that as per Circular No.125/44/2019-GST dated 18.11.2019, there was no provision for refund of unblocked ITC, as such the refund claim was inadmissible. Being aggrieved by the order of rejection, assessee prayed for refund along with interest on delayed payment. It was held that assessee had debited the tax dues for March, 2021 both through electronic credit ledger which was lying blocked during that period, and through electronic cash ledger through which he had actually paid. Therefore, there was no duplication or twice payment of the tax for the said tax period. 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. Assessee 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 accumulated ITC in his electronic credit ledger in lieu thereof could well be utilized for future tax liability. However assessee had not been undertaking business since March, 2021 and the accumulated ITC remained in his electronic credit ledger. In that case, the claim for refund was not made out in terms of Section 54(3) of the CGST Act as none of the enumerated conditions were made out. Assessee under a misconception of law had sought refund of the accumulated ITC in its electronic credit ledger when there had been no duplication of payment of tax for any tax period. It was up to assessee to utilize the unutilized ITC for future tax liabilities.
