The Delhi High Court in the case of Vision Distribution Pvt. Ltd. while allowing the refund of TRAN-1 credit held that the Petitioner cannot be made to suffer on account of failure on the part of the Respondents in devising smooth transition to GST regime w.e.f. 01.07.2017, from the erstwhile indirect taxation structure.
The grievance of the Petitioner is that due to the inaction of the Respondents and their failure to allow smooth migration of the Tran-1 credit standing in the Petitioner’s account of unutilized input tax, the Petitioner could not use and exploit the Input Tax Credit while making exports in the months of July and August, 2017 and was forced to shell out the amount of Rs. 1,37,37,029/-, which would not have been the case, had the Petitioner been able to utilize its Input tax Credit which had accumulated even prior to the enforcement of the GST regime.
On the other hand, the respondent submitted that the Petitioner uploaded the Form GST TRAN-1 only in the month of December, 2017, even though it was possible for the Petitioner to upload the same from 28.08.2017 onwards. Further that under the GST regime, there is no provision for grant of refund of the accumulated ITC and the result of the Petitioner of paying the tax in cash to the tune of Rs. 1,37,37,029/- has been that the Petitioner has earned ITC for the equivalent amount which is lying credited in its ITC ledger from November 2017 onwards, and it is open to the Petitioner to utilize the same in future.
The Bench constituting of Justices Vipin Sanghi and Rekha Palli held that they are inclined to direct partial refund of the amount claimed by the petitioner on the ground that the non-availability of the refund and consequent delay in utilization of ITC was due to the non-operation of the GST portal, which definitely does not point out to petitioner’s fault even minutely.
The Bench outrightly rejected the submissions made on behalf of the Department on the ground that “to get away with such an argument would be equivalent to putting a premium on inefficiency”.
Hence, the Respondents by way of the present judgment were directed to refund the said amount within four weeks from today.
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