TMI Blog2023 (4) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... not produced books of accounts, it is not entitled to get refund of the amount. The petitioner was issued with a show-cause notice in RFD-08 on 28.06.2022 for production of books of account, i.e., input wise details of spare parts used during the assembling/manufacturing process of e-vehicles in order to ascertain the amount of inputs used during the assembling/manufacturing of e-vehicles only and fixing the date for personal hearing to 13.07.2022. The petitioner replied to the show-cause notice on 06.07.2022 and submitted the documents, as mentioned at serial no. (a) to (i) in the said paragraph, but the petitioner failed to submit the input wise details of spare parts used during the assembling/ manufacturing process of e-vehicles. Therefore, no illegality or irregularity has been committed by the authority in rejecting the refund application of the petitioner. It is admitted on the part of the opposite parties that the dispute is with regard to refund of Rs.5,18,230/-, which requires proper adjudication by the authority on production of documents, as claimed by the opposite parties. Therefore, excluding Rs.5,18,230/-, out of Rs.2,22,97,228/-, the balance amount has to be refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures and supplies spare parts chargeable to GST @18% and 28% to its channel partners (dealers), as they are required to provide warranty of their products. As the input and output rate of GST on spare parts are same, no ITC gets accumulated in respect of spare parts. Hence, the supply of spare parts is not treated as inverted sales. 2.1 During the tax period from December 2021 to January 2022, the petitioner had filed return in GSTR-1 in respect of details of outward supplies of goods or services and also filed return in Form GSTR- 3B in respect of details outward supplies and inward supplies of goods or services. In accordance with the regular practices followed by the petitioner for the previous tax periods, i.e., filing of periodic refund application, it filed refund application on 02.06.2022 in respect of accumulated unutilised ITC of the input goods in Form GST-RFD-01 to the tune of Rs.1,57,92,298.00 for the period December 2021 to January 2022 and it was issued with receipt of refund application, i.e., Refund ARN Receipts. On 22.06.2022, the petitioner submitted all the relevant documents in support of its refund application claiming refund of Rs.1,57,92,298.00 for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opposite party no.2 called upon the petitioner on 29.07.2022 through e-mail, wherein the petitioner was asked to provide the documents within 2 days of the service of the letter in connection with refund application submitted under Section-54(3) of CGST/OGST Act for the period from December, 2021 to January, 2022. In compliance thereof, the petitioner filed its reply on 30.07.2022 to the questionnaire given by producing the books of account before opposite party no.2, who examined the same. By so submitting, the petitioner prayed for allowing the refund application as early as possible in the light of the statutory provision. But the petitioner was issued and served with Form- GST-RFD-06 dated 02.08.2022, whereby its refund application dated 02.06.2022 for the period from December, 2021 to January, 2022 was rejected by opposite party no.1 on the ground that it had not submitted the entire books of account. Hence, this writ petition. 3. Mr. R.P. Kar, learned counsel appearing for the petitioner vehemently contended that for the period from 01.11.2021 to 30.11.2021, the refund was partially disallowed by opposite party no.1, which was challenged before the appellate authority, i.e, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on account of inverted duty structure. It is further contended that computation of refund on account of Inverted Duty Structure is done on the basis of the formula provided under Rule-89(5) of the OGST Rules. The same having not been adhered to, the petitioner is not entitled to get the benefit, as claimed in the application itself. Therefore, he contended that the writ petition should be dismissed. 5. This Court heard Mr. R.P. Kar, learned counsel appearing for the petitioner and Mr. Sunil Mishra, learned Additional Standing Counsel appearing for CT GST Department in hybrid mode and perused the records. Pleadings have been exchanged between the parties and with the consent of learned counsel for the parties, the writ petition is being disposed of finally at the stage of admission. 6. For just and proper adjudication of the case, relevant provisions of the Act and Rules are referred below:- Chapter-XI of the OGST Act, 2017 deals with refund. Sec.54. Refund of tax. xxx xxx xxx (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of tax paid on export of services with payment of tax; c. Refund of unutilized ITC on account of supplies made to SEZ Unit/SEZ Developer without payment of tax; d. Refund of tax paid on supplies made to SEZ Unit/SEZ Developer with payment of tax; e. Refund of unutilized ITC on account of accumulation due to inverted tax structure; f. Refund to supplier of tax paid on deemed export supplies; g. Refund to recipient of tax paid on deemed export supplies; h. Refund of excess balance in the electronic cash ledger; i. Refund of excess payment of tax; J. Refund of tax paid on intra-State supply which is subsequently held to be inter-State supply and vice versa; k. Refund on account of assessment/provisional assessment/appeal/any other order; l. Refund on account of any other ground or reason. Clause-13 deals with provisional refund, which reads as follows: 13. Doubts get raised as to whether provisional refund would be given even in those cases where the proper officer prima-facie has sufficient reasons to believe that there are irregularities in the refund application which would result in rejection of whole or part of the refund amount so It is clarified that in such cases, the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of refund of accumulated ITC on account of inverted tax structure, in cases where several inputs are used in supplying the final product/output, can be clearly understood with the help of following example: i. Suppose a manufacturing process involves the use of an input A (attracting 5 per cent GST) and input B (attracting 18 per cent GST) to manufacture output Y (attracting 12 per cent GST). ii. The refund of accumulated ITC in the situation at (i) above, will be available under section 54(3) of the CGST Act read with rule 89(5) of the CGST Rules, which prescribes the formula for the maximum refund amount permissible in such situations. iii. Further assume that the applicant supplies the output Y having value of 3,000/-during the relevant period for which the refund is being claimed. Therefore, the turnover of inverted rated supply of goods and services will be Rs. 3,000/-. Since the applicant has no other outward supplies, his adjusted total turnover will also be Rs. 3,000/-. iv. If we assume that Input A, having value of 500/- and Input B, having value of Rs. 2,000/-, have been purchased in the relevant period for the manufacture of Y, then Net ITC shall be equal to Rs. 385/- (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /capital goods Yes/no/Partially 1 2 3 4 5 6 7 8 9 10 11 12 13 14 8. In Annexure-8, the CT GST Officer, Bhubaneswar-1 intimated the petitioner to furnish details of manufacturing numbers of vehicles and inputs used thereon during December, 2021, January 2022, February 2022. The documents, which were required to be furnished by the petitioner, are given below:- 1. How many electric vehicles manufactured in the above mentioned period. 2. How many types of electric vehicle you have manufactured in your organization and production of each category during the above mentioned period. 3. Input Service and Input Goods used for the manufacturing of one unit of electronic vehicle. (provide the details of Inputs both goods and services used in each category) . 9. The ground of rejection of the refund application of the petitioner, as contained in the order impugned under Annexure-11, reads as follows:- Ground of rejection: But on verification, it is found that the output turnover includes GST rate of 5%, 12%, 18%, 28%. It means apart from selling of electric vehicle, the taxpayer is also engaged in the selling of the spare parts procured from different vendor-domestic as well as overseas, as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is contended that the petitioner was engaged in the manufacturing of e-vehicles wherein spare parts were used and, as such, a detailed accounts of spare parts utilized in manufacturing and in supply thereof was required. Therefore, the petitioner was issued with a show-cause notice in RFD-08 on 28.06.2022 for production of books of account, i.e., input wise details of spare parts used during the assembling/manufacturing process of e-vehicles in order to ascertain the amount of inputs used during the assembling/manufacturing of e-vehicles only and fixing the date for personal hearing to 13.07.2022. The petitioner replied to the show-cause notice on 06.07.2022 and submitted the documents, as mentioned at serial no. (a) to (i) in the said paragraph, but the petitioner failed to submit the input wise details of spare parts used during the assembling/ manufacturing process of e-vehicles. Therefore, no illegality or irregularity has been committed by the authority in rejecting the refund application of the petitioner. 12. After arguments were advanced for some time from both sides, this Court made a query with regard to liability of the petitioner to pay the tax to the authority for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 473, Lord Simonds held that A taxing statute is to be strictly construed, which has been well-established rule in the familiar words of LORD WENSLEYDALE, reaffirmed by LORD HALSBURY AND LORD SIMONDS, means: The subject is not to be taxed without clear words for that purpose; and also that every Act of Parliament must be read according to the natural construction of its words . The said principle has been followed by the apex Court in Member Secretary, Andhra Pradesh State Board for Prevention and Control of Water Pollution v. Andhra Pradesh Rayons Ltd ., AIR 1989 SC 611. 16. In Potts Executors v. IRC , (1951) 1 All ER 76, it has been held that if there be admissible in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute . Similar view has also been taken by the apex Court in Hansraj Sons v. State of Jammu Kashmir , AIR 2002 SC 2692 and in Government of Andhra Pradesh v. Laxmi Devi , (2008) 4 SCC 720. 17. In view of facts and law, as discussed above, this Court directs the opposite parties to refund the balance amount, excluding Rs.5,18,230/- from out of to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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