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2020 (12) TMI 1117 - HC - GSTRefund of ITC of CGST and SGST - N/N. 26/2017 Custom, dated 29.06.2017 - HELD THAT:- After the present writ-application was filed on 20th December 2020, Section49 of the CGST came to be amended w.e.f. 01/02/2019 and new Section49A and Section49B were inserted in the said Act. By virtue of power under Section49B, Rule88A was inserted w.e.f.29/03/2019 in the CGST Rules vide Notification No.16/2019CT, dated 29/03/2019. In such circumstances, w.e.f. 01/02/2019, the ITC available on account of IGST has to be first utilized for the payment of IGST or CGST or SGST. This provision was amended w.e.f.01/02/2019, but the GST portal started functioning as per the amended provisions w.e.f.01/06/2019. Therefore, w.e.f. 01/06/2019, the accumulated ITC of IGST of ₹ 4,47,43,682/- (Additional Customs duty paid by the writ-applicants, EPCG holder) started getting utilized automatically during the pendency of the petition. The ITC of CGST and SGST started accumulating correspondingly. In such circumstances, as on date on account of such amendment in operation, the writ-applicants have Nil balance of IGST in its electronic credit ledger and the IGST balance is converted into CGST and SGST. In other words, the balance of CGST and SGST got artificially inflated as a result of the appropriation of IGST credit. The respondents are directed to sanction and pay the refund of ₹ 4,47,43,681/after first reversing the entries of utilization of the subject credit and debiting the said amount from the credit ledger consequently available to the writ-applicant - Application allowed.
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