Quest Global Engineering Services Private Limited VS Deputy Commissioner of GST

he court heard arguments from the petitioner’s counsel and the respondent’s Junior Panel Counsel. After reviewing the case records, decisions referenced by both parties, and a circular dated 29.12.2017 presented by the petitioner’s counsel, the following summary emerges:

The petitioner contends that their Transferor Company, Quest Global Engineering Private Limited, was merged with them. During June to September 2017, Quest Global Engineering Private Limited issued invoices to their client, M/s. Caterpillar India Private Limited, and fulfilled tax obligations under the Finance Act, 1994, and the GST Acts of 2017.

The matter concerns a petition where the petitioner, represented by their counsel, contends that after the merger of Quest Global Engineering Private Limited (the Transferor Company) with the petitioner company, pursuant to an order from the National Company Law Tribunal dated 01.10.2017, certain invoices issued by the Transferor Company in June, July, August, and September 2017 to M/s. Caterpillar India Private Limited were inadvertently included in the petitioner’s tax filings and taxes were paid accordingly. These invoices were mistakenly integrated into the petitioner’s system after the merger, leading to the petitioner paying taxes on services that were not actually provided post-merger.

The petitioner asserts that the invoices dated 01.11.2017, reflected in their tax returns, were not generated by them but were a result of erroneous integration of the Transferor Company’s data into their system. Consequently, the petitioner ended up paying taxes on invoices that were not actually issued by them nor involved in services rendered to their customer. The petitioner seeks relief based on these grounds.

The court, after hearing arguments from both sides and examining relevant records and circulars, will decide on the validity of the petitioner’s claim regarding the tax liabilities arising from the merger and the integration of financial data between the Transferor Company and the petitioner company.

The court heard arguments from the petitioner’s counsel and the respondent’s Junior Panel Counsel regarding a dispute over tax liability following the merger of Quest Global Engineering Private Limited with the petitioner company. The petitioner claimed that after the merger, invoices raised by Quest Global in June to September 2017, and subsequently integrated into the petitioner’s system, led to inadvertent tax payment on invoices generated on November 1, 2017. The petitioner asserted that these invoices were never issued by them, resulting in erroneous tax payment.

In response, the respondent argued that the petitioner failed to provide evidence demonstrating previous tax payments or that M/s. Caterpillar India Private Limited did not claim Input Tax Credit based on the petitioner’s invoices. The respondent further invoked Section 54 of the Central Goods and Services Tax Act, 2017, stating that limitations on refunds or adjustments apply even in cases of mistaken tax payments due to non-supply of services.

Upon review of records and relevant legal precedents, the court considered the facts and submissions from both sides. The petitioner’s case centered on the integration of data post-merger leading to inadvertent tax payment, while the respondent emphasized procedural and evidentiary requirements under GST laws. The court’s decision would hinge on reconciling these arguments with statutory provisions and precedents cited during the hearing.

The case involves a dispute between the petitioner and the respondent regarding a mistaken tax payment made by the petitioner. The petitioner, after the merger of Quest Global Engineering Private Limited (the Transferor Company) with itself, inadvertently paid service tax on invoices raised by the Transferor Company in June, July, August, and September 2017. These invoices were already accounted for by the Transferor Company before the merger. The merger was authorized by the National Company Law Tribunal on 1st October 2017, after which the petitioner integrated the data of the Transferor Company into its own systems.

The mistake occurred when the petitioner’s system automatically included these already taxed invoices in their returns for November 2017, resulting in an unintended tax payment by the petitioner. The petitioner asserts that they did not generate these invoices on 1st November 2017 and ended up paying taxes on them due to a system error.

In response, the respondent argues that the petitioner failed to provide evidence that the taxes were already paid between June and September 2017 or that M/s. Caterpillar India Private Limited (the customer) did not claim Input Tax Credit based on these invoices. Additionally, the respondent points out that under Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act), claims for refund must be filed within two years from the date of tax payment. Since the petitioner filed for a refund on 30th May 2020, well beyond this two-year limit, the respondent contends that the claim is time-barred.

In conclusion, the dispute revolves around whether the petitioner’s mistaken tax payment qualifies for a refund despite being outside the statutory time limit and whether the petitioner adequately substantiated their claim that taxes were previously paid or that Input Tax Credit was not claimed by the customer.

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