The Hon’ble High Court of Madras High Court vide its order dated 08th March 2022 in the matter of Rainbow Stones Private Limited Vs. Assistant Commissioner (ST), Hosur in Writ Petition No. 27482 and W.M.P. Nos 29000 & 29002 of 2021 held that if the refund application were filed prior to the introduction of Goods and Service Tax and was not processed at that point in time, has to be dealt with under Section 142 (3) for sanctioning and processing the refund claim after introduction of GST.
The Petitioner preferred the writ petition challenging the impugned order bearing Ref. No: GSTIN:33AADCR7947K1ZY/2017-18 dated 09.07.2021 and quash the same, directing the respondents to grant refund in the event of reversal of input tax credit carried forward by filing Form Tran -1.
- 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 on 05.2016 duly filed a reply -cum- request to the aforesaid show cause notice stating 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.
- The petitioner subsequently sent a reminder on 12.2016, however the respondent after the receipt of both, the reply-cum-request and the reminder, did not dispose/process the refund claim.
- Thereafter the petitioner received the impugned order 07.2021 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. Hence the present writ petition.
Petitioner’s Stand: –
- It was submitted on the behalf of the petitioner that the only impediment as per revenue was that the petitioner did not file the Form -W within the time limit.
- Further, the petitioner has submitted all the relevant documents including Form-W with the reply dated 05.2016 and subsequently with the reminder dated 30.12.2016.
- The respondent ought to have decided the refund claim in the erstwhile regime only when all the relevant documents were provided and a request was made for the same.
- That after the introduction of GST it shall be dealt with under Section 142(3) which states about disposal of claims as per the provisions of existing law, and existing law would be ‘TNVAT Act’.
- The application of the petitioner should be decided on merits after considering all the relevant documents submitted, thus the impugned order does not stand in legal scrutiny.
On the other hand:
- It was submitted on the behalf of revenue 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.
- 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 Hon’ble Court 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.