Andhra Pradesh High Court - Amravati
Cholayil Private Limited vs The State Of Ap on 21 August, 2024
Author: R. Raghunandan Rao
Bench: R Raghunandan Rao
APHC010254192023
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3488]
(Special Original Jurisdiction)
WEDNESDAY ,THE TWENTY FIRST DAY OF AUGUST
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO
THE HONOURABLE SRI JUSTICE HARINATH.N
WRIT PETITION NO: 17837/2023
Between:
Cholayil Private Limited ...PETITIONER
AND
The State Of Ap and Others ...RESPONDENT(S)
Counsel for the Petitioner:
1. MADHAVA RAO NALLURI
2. JOSEPH PRABHAKAR
Counsel for the Respondent(S):
1. GP FOR COMMERCIAL TAX
The Court made the following Order:
The petitioner is a manufacturer of medicinal soaps which are sold in
India and outside India. The petitioner states that it was entitled to refund of
certain unutilized CENVAT credit and two applications for such purposes were
made in the year 2016 and 2017. The petitioner had made an application for
refund of an amount of Rs.64,88,803/- and another application for refund of an
amount of Rs.48,44,124. Both these applications were disposed of by the
Assistant Commissioner, Central Excise, Nellore Division by two separate
orders dated 19.06.2017. In the first order, the Assistant Commissioner
rejected the refund claim of Rs.60,53,365/- and held that ineligible amount of
Rs.4,35,438/- is allowed to be taken back as credit in the CENVAT credit
account of the petitioner. Similarly, in the second order, the Assistant
Commissioner rejected eligible refund claim of Rs.35,57,702/- while allowing
ineligible amount of Rs.12,86,422/- to be taken back as credit in the CENVAT
credit account of the petitioner.
2. Aggrieved by these two orders, the petitioner had approached the
Commissioner, Central Tax and Customs (Appeals), Guntur. Both these
appeals were rejected by the Commissioner, by way of two orders dated
16.04.2019. The petitioner states that these appeals had been rejected on
grounds of delay in filing the appeals.
3. In a parallel development, the GST regime was introduced on
01.07.2017. As part of the transitional provisions, manufacturers/dealers
having CENVAT credit were permitted to transition the said credit to the GST
regime by filing a form known as Form TRAN-I. The petitioner herein had
utilized that benefit and had transitioned the CENVAT credit available in the
account of the petitioner to the GST regime, except to the extent of the
disputed refund amounts mentioned above.
4. Various manufactures and dealers who had CENVAT credit in
their account were unable to transition to the GST regime due to various
technical clichés and problems. These manufacturers/dealers had approached
the Courts resulting in a Judgment of the Hon'ble Supreme Court in the case
of Union of India vs. Filco Trade Center Private Limited 1. The Hon'ble
Supreme Court in this Judgment, dated 22.07.2022, had issued certain
directions to the tax authorities to permit further transition of CENVAT credit to
the GST regime by permitting filing of TRAN-1 and TRAN-2 forms for the
period 01.10.2022 to 30.11.2022. This period was consequently extended. In
compliance of the directions of the Hon'ble Supreme Court, Government
issued circular bearing No.180/12/2022-GST dated 09.09.2022 setting out the
conditions under which the manufacturers/ dealers were given a second
chance to transition from CENVAT credit to the GST regime.
5. The petitioner, opted to try his luck by filing a fresh TRAN-1 form
seeking transition of CENVAT credit which had not been refunded on account
of the above orders. This application of the petitioner was rejected by the
Deputy Commissioner on 27.02.2023. The application of the petitioner was
rejected on the ground that the said application is covered by instruction
No.4.7 of the aforesaid circular and as such the request of the petitioner for
transitioning further credit is not permissible.
6. The said para 4.7 of the circular instructions reads as follows:
4.7. It is clarified that those registered persons, who had
successfully filed TRAN-1/TRAN-2 earlier, and who do not
require to make any revision in the same, are not required to
file/revise TRAN-1/TRAN-2 during this period from
01.10.2022 to 30.11.2022. In this context, it may further be
noted that in such cases where the credit availed by the
registered person on the basis of FORM GST TRAN-
1/TRAN-2 filed earlier, has either wholly or partly been
rejected by the proper officer, the appropriate remedy in such
(2022) 63 GSTC 162(SC)
cases is to prefer an appeal against the said order or to
pursue alternative remedies available as per law. Where the
adjudication/appeal proceeding in such cases is pending, the
appropriate course would be to pursue the said
adjudication/appeal. In such cases, filing a fresh declaration
in FORM GST TRAN-1/TRAN-2, pursuant to the special
dispensation being provided vide this circular, is not the
appropriate course of action.
7. The Deputy Commissioner took the view that this provision
meant that any transition of disputed tax is barred by this provision.
8. A reading of this provision would make it clear that this provision
stipulates that if a request made, under TRAN-I/TRAN-2, in the earlier period
had been rejected, the same cannot be reiterated under the second chance
given by the Hon'ble Supreme Court. In such circumstances the only option
available to the person making such an application is to file an appeal against
the earlier order of rejection of transition. In the present case, the rejection
order was passed under the CENVAT regime itself and it is not an order of
rejection of TRAN-1/TRAN-2.
9. The learned Government Pleader for Commercial Taxes, would
submit that in any event, the application would have to be rejected in as
much as the order of rejection of refund effectively bars any usage of the said
credit and consequently there cannot be any transition of that credit from the
CENVAT regime to the GST regime.
10. This contention raised by the learned Government Pleader is not
available in the order impugned before us and as such cannot be looked into
in view of the judgment of the Hon'ble Supreme Court in Mohinder Singh
Gill & Another Vs. The Chief Election Commissioner2.
11. In the event, the impugned order dated 27.02.2023 in
DIN3718012392140 and DIN3718012314992 is set aside, remanding the
matter back to the Deputy Commissioner to consider the matter afresh.
Needless to say, the Deputy Commissioner shall give adequate opportunity
to the petitioner to set out its case and also to reply to any issues raised by
the Deputy Commissioner. The exercise of considering and passing orders
on the TRAN-1 and TRAN-2 Form filed by the petitioner shall be completed
expeditiously and at any rate within four (4) months from the date of receipt of
this order.
12. Accordingly, this Writ Petition is allowed. There shall be no order
as to costs.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
________________________
R. RAGHUNANDAN RAO, J
_____________
HARINATH.N,J
RJS
(1978) 1 SCC 405
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
&
HON'BLE SRI JUSTICE HARINATH N.
WRIT PETITION NO: 17837 of 2023
Dt: 21.08.2024
RJS
