tax structure Bulk Gas allowed
Case Title | M/s. Shivaco Associates & Anr. Vs Joint Commissioner of State Tax, Directorate of Commercial Taxes & Ors. |
Court | Calcutta High Court |
Honorable Judges | Justice Amrita Sinha |
Citation | 2022 (3) GSTPanacea 286 HC Calcutta WPA No. 54 of 2022 |
Judgement Date | 11-March-2022 |
Council for Petitioner | Mr. Jagriti Mishra, U. Ali and Subrata Pal |
Council for Respondent | Mr. Subir Kumar Saha and Bikramaditya Ghosh |
In Favor Of | Petitioner |
Section | Section 168(1), Section 54 of CGST Act,2017 and Circular No. 135/2020-GST dated 31.03.2020. |
The Calcutta High Court, Jalpaiguri Bench of Justice Amrita Sinha, held that the impugned orders passed by the adjudicating authority and the appellate authority are liable to be set aside and quashed.
tax structure Bulk Gas allowed
FACTS OF THE CASE
Shivaco Associates & Anr. Vs Joint Commissioner of State Tax, (Calcutta High Court) The petitioners claim refund in accordance with Section 54(3) of the CGST Act, 2017 on the ground that credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. Admittedly, the rate of tax on the input supply (LPG in bulk) is 18% and the rate of tax on output supply (LPG in small Containers for domestic consumers) is 5%. The claim of the petitioners for refund stood rejected on the ground that the input and output supplies are the same. The said restriction on claiming refund has been imposed by the circular dated 31.03.2020. The said circular was issued in exercise of the powers conferred under Section 168(1) of the CGST Act, 2017. According to Section 168(1) of the Act the Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the implementation of the Act, issue such orders, instructions or directions to the central tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of the Act shall observe and follow such orders, instructions or directions. According to the petitioners, the gas which is purchased in bulk is not supplied to the consumers in the same manner and quantity, but bulk gas is refilled in small containers and thereafter sold out to both commercial as well as domestic consumers. Hence, it cannot be said that the input and output supplies remain the same.
tax structure Bulk Gas allowed
COURT HELD
In the present case, the Act does not mention about non-granting of the benefit of accumulated input tax credit where the input and output supplies are the same. The circular is trying to restrict the refund to a particular set of supplies. The circular is trying to create a class inside the class, which is impermissible. According to the Act, refund is permissible in respect of all classes where the input tax is higher than the output tax. By way of the circular, the Board is curtailing the said benefit and making refund permissible only if the input and output supplies are different. The same amounts to overreaching the provisions as laid down in the Act. It cannot be said that the legislature was unmindful of the fact that there may be instances where the input and output supplies are the same. On the contrary, it can be said that the legislature consciously did not create any distinction for allowing refund in all cases where the input tax is more than the output tax. The said benefit is applicable to all similar cases. The respondent authority ought not to reject the claim of the petitioners relying on the circular as the prayer made by the petitioners is permissible under the Act. In view of the discussions made hereinabove, the impugned orders passed by the adjudicating authority and the appellate authority are liable to be set aside and quashed. The same are accordingly set aside and quashed.
tax structure Bulk Gas allowed
ANALYSIS OF THE JUDGEMENT
From the above case we can conclude that circulars being clarificatory cannot curb benefits available in the GST Act.
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M/s. Shivaco Associates & Anr.
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