Refunds filed prior to GST regime to be processed under section 142 (3) of the CGST Act, 2017.

Facts: In this case, the petitioner filed a refund claim in the erstwhile TNVAT Act, the department after considering the refund claim issued a show cause notice to the Petitioner. The petitioner in its reply -cum- request to the aforesaid show cause notice stated that ‘we are the manufacturer and exporter of Granite Slabs and most of our sales are export only and less sales in domestic, thus unable to utilize ITC’. A request for sanctioning the refund was also made by the Petitioner. Thereafter the petitioner received the order stating that its not eligible for refund as it pertains to erstwhile TNVAT regime and the present demand made has to be paid by the petitioner.

The petitioner contended that the only impediment as per revenue was that the petitioner did not file the Form -W within the time limit, whereas all the relevant documents including Form-W with the reply dated 05.2016 and subsequently with the reminder dated 30.12.2016 was submitted.  On the other hand, the revenue contended that the petitioner did not file the Form -W which needs to be filed within 180 days. In the meanwhile, GST regime came in to effect from 01.07.2017, thus the question of considering the refund claim under erstwhile TNVAT Act does not arise. Further, the petitioner is not entitled for refund; hence the application of refund claim cannot be considered under Section 142(3) of the CGST Act, and the impugned order is sustainable.

The petitioner aggrieved by the said order presented the writ petition.

Issue: whether refund claimed prior to GST regime came into effect i.e. 01.07.2017, is entitled to be processed.

Held: The High Court held as –

• After considering the submissions made, facts of the case, and the law applicable on the issue held, it has been rightly pointed out on the behalf of the petitioner that on 05.2016 a reply- cum-request followed by a reminder dated 30.12.2016 was made by the petitioner before the erstwhile VAT authorities for considering the refund claim. The refund claim ought to have been decided and disposed on merits there itself, however they waited till the introduction of GST regime for passing the impugned order.
• Section 142(3) as quoted in the impugned order provides for the applications filed and pending before the appointed day i.e., 07.2017, the same could have been disposed of under the existing law i.e., TNVAT Act. When that being so, it is not known as to what was the difficulty of the Revenue to decide such refund claim filed by the petitioner within the meaning of Section 142(3) of the GST Act read with the erstwhile provisions under the TNVAT Act.
• The Hon’ble High Court with the above findings disposed of the writ petition and stayed the impugned order, directing the respondents to dispose of the refund claim at the earliest after providing a personal hearing and considering the reply dated 23.05.2016, the reminder dated 30.12.2016 and the documents including Form – W.

To read the complete judgment 2022 Taxo.online 243