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TMI Blog2020 (11) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... i Block, which will, hereinafter be referred to as Unit-I and Unit-II, respectively. Both the Units are registered under General Sales Tax Index (GSTI) vide GSTI number. 3. It is the case of the petitioner that during the month of August, 2017 two consignments of pine bark extract and Crospovidone NF were transferred by the petitioner from Unit-II to Unit-I. As the transfer did not qualify as supply in terms of Section 7 of the CGST Act, such transfer ought to have been effected under the cover of a delivery challan but, inadvertently two invoices bearing No. S 11725000335 dated 14.08.2017 and S 11725000354 dated 17.08.2017 came to 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 Rs. 15,82,938.72 and Rs. 1,659.42, respectively, totalling Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal under Section 112 of the CGST Act. 7. Mr. Rahul Tangri, learned Counsel for the petitioner submits that the impugned order dated 11.09.2019 that travelled beyond the grounds cited in the SCN dated 08.03.2019, and therefore, the impugned order is violative of principles of natural justice. It is submitted by him that once the reason for rejection of the prayer for refund was found to be erroneous, the appeal of the petitioner ought to have been allowed. It is submitted that the findings recorded by the Appellate Authority that the petitioner had rectified the error committed in payment of tax in GSTR-3B 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 cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which refund had been claimed having been issued in the month of August, 2017, there is no illegality in placing reliance on the said Circular dated 01.09.2017 as the same was very much in force at that point of time. It is submitted by him that the petitioner was required to adjust the error following the steps outlined in the Circular dated 29.12.2017. He has also reiterated the finding recorded by the Appellate Authority that the excess payment of tax in GSTR-3B is not actually an excess payment of tax as it can be auto adjusted in the subsequent months. However, the appellant did not adjust its excess payment 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 Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of evidencing the supply of goods made and Delivery of challan (in original) for the purpose of evidencing that this was only movement of goods to one unit to another, payment particulars, statement in respect of excess payment of tax etc. as per the instruction given in Circular No. 37/11/2018-GST dated 15.03.2018 and required declarations also as stated in the said circular of refund." 14. Both the above points were required to be clarified by the petitioner. The petitioner had, accordingly, submitted its reply on 27.03.2019 and representative of the petitioner had also appeared for 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 Rs. 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 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticular month. Reduction in output tax liability: 10. Where the output tax liability of the registered person as per the details furnished in FORM GSTR-1 and FORM GSTR-2 is less than the output tax liability as per the details furnished in the FORM GSTR-3B and the same is not offset by a corresponding reduction in the input tax credit to which he is entitled, the excess shall be carried forward to the next month's return to be offset against the output liability of the next month by the taxpayer when he signs and submits the return in FORM GSTR-3. However, simultaneously, 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 GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax had been carried forward to the next month's return to be offset against the output tax liability for that month. In other words, the Appellate Authority had acknowledged that there was an error in payment of tax in GSTR-3B for the month of August 2017 and that there was an excess payment of tax. Submission of Mr.Tangri that the inquiry conducted by the Appellate Authority was beyond the scope of SCN cannot be accepted. Two questions had arisen for consideration before the Appellate Authority: (i) whether there was excess payment of tax by the 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 wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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