TMI Blog2021 (9) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2 of the circular No.135/05/2020- GST dated 31.03.2020 with the provisions of Section 54(3)(ii) of the CGST Act of 2017. The law in this respect is settled to the extent that whenever there is a conflict between the provisions of a statutory Act and that of a notification or circular issued by an administrative authority, the provisions of the statutory Act would prevail over such conflicting provisions of a notification or a circular of an administrative authority. The said principle of law is so well entrenched that we are not required to refer to any specific judgment on the said point of law and it is a well accepted principle of law - in view of the clear unambiguous provisions of Section 54(3) (ii) providing that a refund of the unutilized input tax credit would be available in the event the rate of tax on the input supplies is higher than the rate of tax on output supplies, the provisions of paragraph 3.2 of the circular No.135/05/2020-GST dated 31.03.2020 providing that even though different tax rate may be attracted at different point of time, but the refund of the accumulated unutilized tax credit will not be available under Section 54(3)(ii) of the CGST Act of 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3880/2021. Also heard Mr. SC Keyal, learned counsel for the petitioners in WP(C)No.3675/2021 and WP(C)4120/2021. 2. It is taken note of that the petitioners in WP(C)No.3675/2021 and WP(C)No.4120/2021 i.e., the authorities under the GST Department are the respondents in WP(C)No.3878/2021 and WP(C)No.3880/2021, whereas the assessee BMG Informatics Pvt. Ltd., is the respondent in WP(C)No.3675/2021 and WP(C)No.4120/2021 and accordingly, the learned counsel representing the respective writ petitioners also represents the respondents in the corresponding writ petitions filed by the other. 3. For the sake of convenience, we refer the petitioner in WP(C)No.3878/2021 and WP(C)No.3880/2021 to be the assessee and the petitioners in WP(C)No.3675/2021 and WP(C)No.4120/2021 to be the department. 4. The assessee BMG Informatics Pvt. Ltd is a company dealing with IT system integrator and is a service provider primarily engaged in sales and service of information and technology products to Government Departments, PSU and to other Research and Educational Institutes located in the North Eastern region. The assessee is a registered dealer under the Central Goods and Service Tax Act 2017 (fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Commissioner refers to paragraph 3.2 of the clarificatory circular No.135/05/2020-GST dated 31.03.2020. 8. In paragraph 5 of the order dated 22.05.2020, the Assistant Commissioner had taken note that the assessee BMG Informatics Pvt. Ltd is primarily engaged in sales and service of information and technology products to Government Departments, PSU and to other Research and Educational Institutes in the North Eastern region. In course of their business, the assessee upon receipt of supply orders from the purchasers, procure materials from the distributors and/or original equipment manufacturers and supply such material to the customers of above description i.e. Government Departments, PSU and other Research and Educational Institutes located in the North Eastern region. Accordingly, it was concluded by the Assistant Commissioner that the assessee BMG Informatics Pvt. Ltd is engaged in trading of technology related products and they are not manufacturers of the product concerned. 9. On an appeal being preferred by the assessee, the order dated 06.11.2020 was passed by the Joint Commissioner (Appeals) CGST, Central Excise Custom, Guwahati {to be referred to as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be same in the instant case but it may be attracting different tax rates depending upon the class of buyer and therefore it does not get covered under the provisions of Section 54(3)(ii) of the CGST Act of 2017. Accordingly, it was the conclusion of the Joint Commissioner (Appeals) that the Assistant Commissioner had arbitrarily disallowed the claim of the assessee for refund by travelling beyond the scope of the show cause notice dated 10.04.2020. In paragraph 6.12 of the order dated 29.10.2020, the Joint Commissioner (Appeals) referred to certain decisions of some authority and, thereafter in paragraph 6.13 arrived at his conclusion that in view of the ratio laid down in the decisions referred, the order of the Assistant Commissioner rejecting the claim of refund was not justified and accordingly it was set aside. Having set aside the order rejecting the claim of refund, the Joint Commissioner (Appeals) held that the assessee is entitled to the benefit of refund of duty under Section 54(3)(ii) of the CGST Act of 2017. 11. We have read both the orders i.e. the order dated 22.05.2020 of the Assistant Commissioner as well as the appellate order of the Joint Commissioner (Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. Section 168(1) of the CGST Act of 2017 is extracted as below: 168(1) The Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the central tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions . 14. A reading of Section 168(1) of the CGST Act of 2017 would go to show that it is a power conferred on the Central Board of Indirect Tax and Customs to issue such orders, instructions or directions to the Central Tax Officers, as it may deemed fit, if it considers it necessary or expedient to do so for the purpose of uniformity in the implementation of the CGST Act of 2017. The said power would have to be read to be a power to the Central Board of Indirect Tax and Customs to issue such orders or instructions, directions to the Central Tax Officers as to what procedure is to be followed in order to bring in an uniformity in the implementation of the CGST Act of 2017. The said power necessarily confines to providing for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies and on the other hand, the Central Board of Indirect Tax and Customs in their circular No.135/05/2020-GST dated 31.03.2020 provides that such refunds will not be available in the event the input supplies and the output supplies are the same, even though there may be a difference in the tax rates on the input supplies and the output supplies. 18. Such declaration/provision/clarification by the Central Board of Indirect Tax and Customs in paragraph 3.2 of their circular No.135/05/2020-GST dated 31.03.2020 appears to be in conflict and provides for the contrary to the provisions of Section 54(3)(ii) of the CGST Act of 2017. Section 54(3)(ii) of the CGST Act of 2017 is extracted as below: Section 54(3)(ii): where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies(other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: 19. A plain reading of the provisions of Section 54(3)(ii) would go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or services or both of any specified description from the whole or any part of the tax leviable thereon. 22. A reading of the Notification No. 45/2017-GST (Rate) dated 14.11.2017 goes to show that in respect of the description of the goods specified therein there would be an exemption of the tax leviable under Section 9 of the Act in respect of excess of the amount calculated @ 2.5%. In other words, whatever is the rate of tax against the specified goods as provided under Section 9 for the output supplies be made to Government Department, PSUs or the Research and Educational Institutes of the North Eastern region, the tax rate would be @2.5% and any tax in excess thereof, as may be provided under Section 9, stands exempted. 23. A reading of the Notification No. 45/2017-GST (Rate) dated 14.11.2017 goes to show that in respect of the goods specified therein there is a partial exemption and it is neither a case of nil rate nor it is a case of full exemption. 24. Accordingly, we are to conclude that in the instant case the input supplies and the output supplies made by the petitioner assessee are not governed either by a nil rate of tax nor it is governed by fully exempted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nored and not taken into consideration for the purpose of arriving at any such decision. 28. Consequently, in view of the clear unambiguous provisions of Section 54(3) (ii) providing that a refund of the unutilized input tax credit would be available in the event the rate of tax on the input supplies is higher than the rate of tax on output supplies, we are of the view that the provisions of paragraph 3.2 of the circular No.135/05/2020-GST dated 31.03.2020 providing that even though different tax rate may be attracted at different point of time, but the refund of the accumulated unutilized tax credit will not be available under Section 54(3)(ii) of the CGST Act of 2017 in cases where the input and output supplies are same, would have to be ignored. 29. Consequent upon the conclusion arrived at, we are of the view that the rejection of the claim for refund by the petitioner assessee in the order dated 22.05.2020 of the Assistant Commissioner by referring to the provisions of paragraph 3.2 of the circular No.135/05/2020-GST dated 31.03.2020 would be unsustainable in law. 30. But at the same time, we also observe that the reasoning given by the Joint Commissioner (Appeals) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20-GST dated 31.03.2020 was issued in exercise of the powers under Section 168(1) of the CGST Act of 2017. As already noted, Section 168(1) of the CGST Act of 2017 pertains to a situation where the Central Board of Indirect Tax and Customs considers it necessary and expedient to do so for the purpose of uniformity in implementing the CGST Act of 2017. In other words, the provisions of Section 168(1) can be invoked to bring in uniformity in the implementation of the CGST Act of 2017. In the instant case, when the provisions of Section 54(3)(ii) of the CGST Act of 2017 are unambiguous and explicitly clear in nature, there is no requirement of bringing in any uniformity in the implementation of the Act and the provisions of Section 54(3)(ii) would have to be applied in the manner it is provided in the Act itself. 34. Accordingly, the requirement of passing the reasoned order by the Assistant Commissioner on the matter being remanded back be done within a period of six weeks from the date of receipt of a certified copy of this order. 35. Needless to say that whatever reasoned order is passed within the period of six weeks, the actual effect thereof be also given thereafter withou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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