M/S Alstom Transport INDIA Limited Through Authorised Signatory Shah Diptej Harshadkumar vs. Additional Commissioner, CGST And Central Excise (Appeals)

Facts

The petitioner, Alstom Transport India Ltd. (ATIL), filed multiple writ petitions challenging Orders-in-Appeal that set aside refund orders. These refunds were sought by Alstom Rail Transportation India Pvt. Ltd. (ARTIPL) for unutilized Input Tax Credit (ITC) after its amalgamation into ATIL. The amalgamation was approved by the NCLT on August 10, 2023, effective September 22, 2023, with ARTIPL's business transferring to ATIL. ARTIPL had exported goods in April 2023 and subsequently filed refund applications for unutilized ITC. While a portion of ITC was transferred via FORM GST ITC-02, a significant amount remained in ARTIPL's ledger. The Deputy Commissioner sanctioned refunds, but the Assistant Commissioner appealed, leading to the impugned Orders-in-Appeal. ARTIPL's GST registration was cancelled on November 29, 2024, after the refund proceedings.

Held

The Court held that the writ petitions fail legal scrutiny and are dismissed. The Court found that the petitioner (ATIL) was not entitled to claim the refund of unutilized ITC lying in the electronic ledger of the erstwhile ARTIPL because ATIL itself had not exported the goods. The Court reasoned that the statute, specifically Section 54(3) of the CGST Act, 2017, and Section 16 of the IGST Act, 2017, permits refund of unutilized ITC on account of exports, and this benefit is tied to the entity that undertakes the export. While acknowledging the amalgamation and the transfer of business, the Court noted that the mechanism for transferring ITC, FORM GST ITC-02, was only partially utilized, and the remaining credit could not be claimed by ATIL in the manner suggested. The Court found no patent illegality in the Order-in-Appeal passed by the Additional Commissioner under Section 107 of the CGST Act, 2017. The Court also observed a "flawed approach" by the jurisdictional officers in dealing with the cancellation of registration and the amalgamation process, directing the Revenue to issue appropriate instructions for scrupulously following statutory provisions in such cases to avoid future complications. No issue was expressly left undecided.

Key Issues

1. Whether the petitioner (ATIL) is entitled to claim the refund of unutilized Input Tax Credit (ITC) lying in the electronic credit ledger of the transferor company (ARTIPL) after amalgamation, despite not having exported the goods itself, and in light of the provisions of Section 54(3) of the CGST Act, 2017 and Section 16 of the IGST Act, 2017? 2. Whether the Orders-in-Appeal, which set aside the refund orders, are sustainable in law? Petitioner's arguments: The petitioner contended that as the transferee company, it is obligated under the Scheme of Amalgamation and the NCLT order to bear the benefits and burdens of the transferor company, including tax claims. They argued that once ARTIPL's GST registration was cancelled, it ceased to have legal existence to prosecute proceedings, and thus ATIL, as the successor, should be able to pursue the refund. They relied on Clause 8.1 of the Scheme of Amalgamation and Paragraph 13 of the NCLT order. Revenue's arguments: The revenue argued that the refund of unutilized ITC for exports can only be claimed by the entity that made the exports. They contended that ATIL, not having made the exports, cannot claim the refund of ITC lying in ARTIPL's ledger, as the statute does not permit such a course. They also argued that the transfer of ITC via FORM GST ITC-02 was only partial, and the remaining amount could not be claimed by ATIL.