TMI Blog2020 (11) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... ility from the said ledger, the same may not be visible on the portal. The Appellate Authority concluded that the petitioner had rectified their error in tax payment in GSTR-3B for the month of August, 2017 in the GSTR-1 of the respective month, and the excess payment of tax had been carried forward to the next month s return to be offset against the output tax liability for that month. However, it does not appear from the order of the Appellate Authority that the Appellate Authority had perused and examined GSTR-1, GSTR-2 and GSTR-3B for the month of September, 2017 to actually find out whether excess payment of tax had been carried forward to be offset against the output tax liability of that month. It was presumed by the Appellate Authority that the petitioner had rectified the error in the GSTR-1 for the month of August, 2017 and that the excess payment of tax had been carried forward in the return of September, 2017. On that presumption, it was held that excess payment of tax in GSTR-3B is not actually an excess payment of tax as it will be auto adjusted by the system and therefore, there is no requirement of refund. No finding has been recorded that, subsequently, excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be issued. Having realized the mistake, the transfers were not declared as outward supply in the Form GSTR-01 for the month of August, 2017. However, at the time of filing of the GSTR-3B return for the month in question, the petitioner inadvertently took these two invoices into consideration and discharged GST amounting to ₹ 15,82,938.72 and ₹ 1,659.42, respectively, totalling ₹ 15,84,598/-. Subsequently, the petitioner filed an online application dated 01.12.2018 in Form GST RFD-01A under Section 54 of the CGST Act seeking refund of such amount. The acknowledgment copy along with all annexures including a copy of the certificate of Chartered Accountant certifying that the petitioner had not passed incidence of tax to any other person was physically delivered before respondent no.2 on 04.12.2018. Respondent no.2, thereafter issued a Show Cause Notice (for short, SCN) dated 08.03.2019 for rejection of application for refund in Form GSTRFD-08 with reference to Rule 92(3) of the Central Goods and Services Tax Rules, 2017 (for short, the CGST Rules), asking the petitioner to show cause within 15 days from the date of receipt of notice with further direction to appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the month of August, 2017 in the GSTR-1 of the respective month and that the petitioner had carried forward the excess amount of tax to the next month s return to be offset against the output tax liability of that month are perverse. It is submitted that an analysis and scrutiny of GSTR-1, GSTR2A and GSTR-3B of the petitioner for the month of September, 2017 would demonstrate that there was no adjustment of tax paid in excess in the month of August, 2017 against GST liability for the month of September, 2017, in any form. Mr. Tangri submits that though in the normal course, GSTR-1 was required to be filed before GSTR-3B, filing of GSTR-1 was deferred by the authorities and the petitioner and all others falling under GST Act was required to submit GSTR-3B before filing GSTR-1. He has submitted that reliance placed on the Circular No. 7/7/2017-GST dated 01.09.2017 issued by the Central Board of Excise and Customs (presently known as Central Board of Indirect Taxes and Customs), which was issued to address the difficulties faced by the assesses regarding the system based reconciliation of forms GSTR-1, GSTR-2 and GSTR-3B, was suspended by Circular No. 26/26/2017-GST dated 29.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of tax in subsequent months. 10. In reply, learned counsel for the petitioner submits that while it was alleged in the SCN that there was no evidence of excess tax paid, in the impugned order dated 11.09.2019, it is held that the petitioner had rectified the error by carrying forward the excess payment of taxes to the next month s return against the output tax liability in terms of the Circular dated 01.09.2017 which goes to show that the petitioner had, in fact, paid taxes in excess for the month of August, 2017. He has contended that the power of the Appellate Authority cannot be stretched to permit the Appellate Authority to make further inquiry in respect of a matter which is not part of SCN and any such further inquiry conducted beyond the SCN will fall foul of the principles of natural justice. It is submitted by him that even while making such inquiry no documents or explanations were sought for from the petitioner. He has contended that on surmises and conjectures and on presumption, the Appellate Authority had passed the impugned order without even verifying as to whether, in reality, the excess tax paid was adjusted in subsequent months. 11. Learned counsel su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or personal hearing before respondent no. 2. The operative portion of the order dated 01.04.2019/02.04.2019 reads as follows: I, hereby reject an amount of ₹ 15,84,599/- (Rupees fifteen lakhs eighty four thousand five hundred and ninety nine) only to M/s Sun Pharma Laboratories Ltd., having GSTIN 11AACCS61631Z4 under Rule 92 (1) of the CGST Rules, 2017 read with Section 54 and 56 of CGST Act, 2017, since, there is no provision under GST Act and GST Rules for refund of excess payment of tax, if payment made through Input Tax Credit . 15. The order seems to suggest that there was excess payment of tax. However, prayer for refund was rejected on the ground that there is no provision under GST Act and GST Rules for refund of excess payment of tax, if such payment is made through ITC. As noted earlier, the Appellate Authority in its order dated 11.09.2019 had categorically held that the ground of rejection of refund claim in the impugned order is erroneous. It would be relevant to extract paragraphs 8, 9 and 10 (recorded as paragraph 9 again) of the order of the Appellate Authority, which read as under: 8. I have carefully gone through the records of the case includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aneously, if there is a decrease in the eligible input tax credit, the same will be adjusted against the above mentioned reduction in output tax liability and the balance, if any, of the reduction in output tax liability shall be carried forward to the next month s return to be offset against the output liability of the next month. 9. It is evident from the above two paras that payment of tax in GSTR-3B is not final. If any error is crept in it, there is the chance of rectifying it at the time of submission of GSTR-1 and GSTR-2. In the instance case, the appellant have rectified their error in tax payment in GSTR-3B for the month of Aug. 17 in the GSTR-1 of the respective month, and the excess payment of tax has been carried forward to the next month s return to be offset against the output tax liability of that month. Thus, any excess payment of tax in GSTR-3B is not actually an excess payment of tax as it will be auto adjusted subsequently by the system. 9. In view of the discussion as mentioned in para(s) 8 and 9 above, there is no requirement of refund in the instance case, and so I reject the instant appeal submitted by the appellant. The instant appeal is disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, and (ii) whether the petitioner is entitled for refund. Once it was held that there was excess payment of tax, obviously, the issue that would engage attention is as to whether refund ought to be granted. It is in that context the question of adjustment had come to the fore and therefore, it cannot be said that the inquiry conducted by the Appellate Authority do not have even any remote nexus with the SCN. 19. However, it does not appear from the order of the Appellate Authority that the Appellate Authority had perused and examined GSTR-1, GSTR-2 and GSTR-3B for the month of September, 2017 to actually find out whether excess payment of tax had been carried forward to be offset against the output tax liability of that month. It was presumed by the Appellate Authority that the petitioner had rectified the error in the GSTR-1 for the month of August, 2017 and that the excess payment of tax had been carried forward in the return of September, 2017. On that presumption, it was held that excess payment of tax in GSTR-3B is not actually an excess payment of tax as it will be auto adjusted by the system and therefore, there is no requirement of refund. No finding has ..... 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