Home Case Index All Cases GST GST + HC GST - 2023 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 924 - HC - GSTRefund of excess availed/utilised Input Tax Credit - violation of Rule 36(4) of the CGST Rules, 2017 - HELD THAT:- As to the merits, the language of the first proviso to Rule 36(4) is plain and clear. Read along with the main part of sub-Rule 4, it only provides an exception to the scheme contained in that sub-Rule. Thus, in the first place Rule 36(4) is complete and provides for a functional rule to avail ITC. It contemplated (during the relevant period) that the eligible ITC for each month would not exceed 10% of the eligible ITC available in respect of the Tax Invoices or Debit Notes, details of which stood furnished by the suppliers under sub-Section 1 of Section 36 in Form GSTR-1 or using Invoice Furnishing Facility (IFF). Therefore, if the first proviso to Rule 36(4) had not been introduced, the petitioner would stand non-suited. In fact, the dispute itself would not have arisen as neither party before us offers any different reading to the main part of Rule 36(4) of the Rules. To that extent, the learned Additional Advocate General is right in his submission that for the purpose of computation of eligible ITC in terms of Rule 36(4), the date of filing of GSTR-1 would remain relevant. No departure thereto may have been made so long as the first proviso to Rule 36(4) did not interject. Coming to the core issue of the language used, the proviso first contemplates that the condition prescribed under Rule 36(4) shall apply cumulatively. The word cumulative has not been defined under the Act or the Rules. However, plainly it conveys increase or addition to size (here quantum) with successive additions without corresponding losses (here deductions). It may be useful to refer to a few dictionary meanings given to the word ‘cumulative’ - the condition contained in sub-Rule 4 of Rule 36 that the eligible ITC would not exceed 10% of the eligible credit as per Tax Invoice or Debit Note etc., filed on GSTR-1 would have to be seen cumulatively i.e., with all additions made, taken together. The period for which such cumulative effect was to be given has also been specified in that proviso, being for the months of February 2020 to August 2020. To that extent, there is no dispute between the parties. If the effort and intent of the legislature had only been to delay the computation of eligible ITC in terms of Rule 36(4), all that was required to be done was to extend the date of filing of return for the months of February 2020 to August 2020, to September 2020. As rightly submitted by the learned Additional Advocate General, that date of filing of monthly returns was never extended. All that was done by means of subsequent Notifications was to waive/reduce late filing fee, interest, and penalty liabilities. On the contrary, the date of filing of monthly returns remained unchanged. Though the Circular letter no. 113 dated 11.11.2019 was valid, it cannot be enforced contrary to the first proviso to Rule 36(4). It lost its efficacy and force and to that extent its relevance, for a limited period of February 2020 to August 2020. For that period, the law intervened and ruled otherwise. That is the plain effect in law caused by the first proviso to Rule 36(4). For the period to which the said proviso applies, the administrative instruction dated 11.11.2019 must survive in complete hibernation. Else, it may lose life to the higher statutory law. The revenue authorities have erred in relying on the said Circular letter to read a condition - "as on date of filing the return in GSTR-I, all the suppliers for the said tax period". For that period, the said condition otherwise enforceable in law [by virtue of the language of Rule 36(4)], stood absolutely relaxed. To the extent the Circular dated 11.11.2019 is contrary to the first proviso to Rule 36(4) of the Rules, it would remain unenforceable in law. That principle is well settled. Insofar as the present petitioner had offered amount of ITC reconciliation by way of its explanation furnished in its reply dated 17.01.2021 and such facts are also stated in the writ petition which again have not been contradicted or denied as may support the objection being now raised, it is not appropriate to remit the matter to the assessing authority, for that purpose. The entire amount recovered may be returned to the petitioner within a period of six weeks from the date a copy of this order is served on the proper officer, by the petitioner. At the same time, the petitioner would remain entitled to interest that we provide @ 6% on the amount of excess recovery of Rs. 11,00,69,010/-, from the date of that excess recovery to the date of its actual refund. The impugned order is quashed - petition allowed.
|