CENVAT credit and Service Tax credit
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Case Title |
Usha Martin Ltd vs Union of India & Ors. |
|
Court |
Jharkand High Court |
|
Honorable Judges |
Justice Aparesh Kumar Singh and Justice Deepak Roshan |
|
Citation |
2022 (8) GSTPanacea 169 HC Jharkhand W.P(T) No. 3055 of 2022. |
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Judgement Date |
18-August-2022 |
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Council for Petitioner |
Mr Sujit Ghosh Mr Joybrata Mishra Mr Ashray Behura Mr Shubham Gautam |
|
Council for UOI |
Mr Prabhat Kumar Sinha |
|
Council for CGST |
Mr Amit Kumar Mr Ashish Kumar Shekhar |
The Ranchi bench of Jharkand High Court of Justice Aparesh Kumar Singh and Justice Deepak Roshan has held that where jurisdiction of Adjudicating Auhtority to initiate proceedings under CGST Act is questionable, Authority shall not proceed with any coercive action to recover tax and penalty.
CENVAT credit and Service Tax credit
FACTS OF THE CASE
The petitioner had carried forward CENVAT credit of Rs 10,21,05,096/- by filing TRAN-1 in terms of section 140 of CGST Act, 2017 of Pre-GST Excise, VAT and Service Tax. Additional Commissioner, CGST and Excise, Jamshedpur being Adjudicating Authority had disallowed the same disputing on the ground of pending litigations of Excise, VAT and service tax for various previous years and non-payment of tax and penalty.
Counsel for Petitioner questioned the jurisdiction of Adjudicating Authority to decide upon availment of CENVAT credit. He referred to details of pending litigations before CESTAT and Commissioner (Appeals) mentioned in SCN in Form GST-DRC-01 dated 08.11.2021 and submitted that there is stay on recovery of tax and penalty by CESTAT, Kolkata for previous years. He referred to section 73 of Finance Act,1994 and Rule 14 of CENVAT Credit Rules,2004 to submit that any such proceeding for wrongful availment of CENVAT credit could have been initiated under the said act only. He submitted that there is distinction between CENVAT credit carried forward from the previous regime and Input Tax Credit mentioned in section 73 of CGST Act,2017. He has referred to the repeal and savings section u/s 174 of the CGST Act ,2017 where he referred to certain decisions for recovery of arrears for any such tax, surcharge, penalty, interest etc, which could be levied or imposed under the pre-GST laws as if repealed acts had not been amended or repealed. In course of his submission he also referred to certain decisions such as Vikram Cement Vs Commissioner of Central Excise, Indore [2006 (197) E.L.T 145 (S.C) para-3]; Raza Textiles Ltd Vs Income Tax Officer, Rampur [(1973) 1 SCC 633, Para-3] ; Carona Ltd. Vs Parvathy Swaminathan & Sons, [(2007) 8 SCC 559, Para-27] in case of repeal or amendment to principal act. Based on above submission counsel for petitioner prayed that proceeding by Additional Commissioner is without jurisdiction and sought interim stay on the recovery of tax and penalty.
Counsel for respondent opposed the prayer and referred to wordings of section 73 of CGST Act, 2017 wherein the proper officer is empowered to initiate proceeding for wrongful availment or utilisation of ITC. He sought 3 weeks’ time to file counter affidavit.
CENVAT credit and Service Tax credit
COURT HELD
Considering the facts as recorded, court admitted petitioners prayer and allowed counsel of respondent a period of 3 weeks to file counter affidavit and thereafter 1 week allowed to petitioner to file reply. Set date of next hearing on 15.09.2022.
The Court directed Adjudicating Authority to not to proceed with coercive steps in connection with the order-in-original dated 30.03.2022 passed in case no 01/CGST/Additional Commissioner/2022 till the next date of hearing. Counsel of petitioner and respondents were directed to supply written notes and compilation of decisions as also provision of law on which they seek to rely, at least 3 days before the next date.
CENVAT credit and Service Tax credit
ANALYSIS OF THE JUDGEMENT
Considering the facts as recorded, court admitted petitioners prayer and allowed counsel of respondent a period of 3 weeks to file counter affidavit and thereafter 1 week allowed to petitioner to file reply. Set date of next hearing on 15.09.2022.
The Court directed Adjudicating Authority to not to proceed with coercive steps in connection with the order-in-original dated 30.03.2022 passed in case no 01/CGST/Additional Commissioner/2022 till the next date of hearing. Counsel of petitioner and respondents were directed to supply written notes and compilation of decisions as also provision of law on which they seek to rely, at least 3 days before the next date.
CENVAT and service tax credit under erstwhile laws and Input Tax Credit under CGST Act are two different matter for determination of jurisdictional authority.
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