Case Law Details
Vision Distribution Pvt. Ltd. Vs Commisioner, State Goods & Services Tax & Ors. (Delhi High Court)
Coming Heavily on GST Department/GSTN Delhi High Court held that The business activity in the country could not be expected to come to a standstill, only to await the Respondents making the GST system workable. The failure of the Respondents in first putting a workable system in place, before implementing the GST regime, reflects poorly on the concern that the Respondents have shown to the difficulties that the trade faced throughout the length and breadth of the country. Unfortunately, even after passage of over two years, the Respondents have not remedied their omissions and failures by taking corrective steps. They continue to take shelter of the limitations in, and the inability of their software systems to grant refund, despite the same being justified. The rights of the parties cannot be subjugated to the poor and inefficient software systems adopted by the Respondents. The software systems adopted by the Respondents have to be in tune with the law, and not vice versa. The system limitations cannot be a justification to deny the relief, to which the Petitioner is legally entitled. We, therefore, reject the hyper technical objections sought to be raised by the Respondents – to the effect, that no refund can be granted, because the system did not reflect any credit lying in the ITC ledger of the Petitioner for the months of July and August, 2017. If that is so, it is entirely the Respondents making. In fact, to permit the Respondents to get away with such an argument would be putting premium on inefficiency. We therefore, reject the submission.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. We have heard learned counsels and proceed to dispose of the present petition. The Petitioner has preferred this petition to seek a direction to the Respondents to issue the refund of Rs. 3,05,09,355/- to the Petitioner. The case of the Petitioner is that it is engaged in the business of sale and purchase of mobile phones. The output supplies made by the Petitioner are also in the course of exports out of India. The Petitioner states that it was registered under the provisions of Delhi Value Added Tax, 2014. When the Goods and Services Tax Act was enforced w.e.f. 01.07.2017, the Petitioner migrated to the said system of taxation. The Petitioner states that it was entitled to carry forward its electronic ledger account of unutilized Input Tax Credit (ITC) in terms of Section 140 of the CGST Act, 2017. As on 01.07.2017, in terms of Section 140 of the CGST Act, the Petitioner claims that it was entitled to CGST credit of Rs. 3,13,06,050/-. The Petitioner points out that in terms of rule 117 of the CGST Rules, the credit of input tax could be submitted in Form GST TRAN-1 within ninety days of the appointed date which was 01.07.2017. Consequently, the last date for submission of Form GST TRAN-1 was 28.09.2017. However, admittedly, the Form GST TRAN-1 was not made available on the web portal of the Respondents upto 25.08.2017. On account of the aforesaid lapse on the part of the Respondents, the Petitioner could not upload its Form GST TRAN-1 either in the month of July, 2017, or for most part of month of August 2017. taxguru.in However, the business activity of the Petitioner continued, namely, of undertaking exports. The Petitioner states that in the month of July, 2017 it made exports entailing deposit of tax in cash to the tune of Rs. 1,37,37,029/, even though the Petitioner was entitled to CGST credit of Rs.3,13,06,050/- as noticed hereinabove, as on 01.07.2017.
2. The grievance of the Petitioner is that due to the inaction of the Respondents and their failure to allow smooth migration of the credit standing in the taxguru.in Petitioner’s account of unutilized input tax, the Petitioner could not use and exploit the Input Tax Credit while making exports in the months of July and August, 2017 and was forced to shell out the amount of Rs. 1,37,37,029/-, which would not have been the case, had the Petitioner been able to utilize its Income tax Credit which had accumulated even prior to the enforcement of the GST regime.
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