M/S. Sahasra Rocks vs. The Assistant Commissioner Of State Tax

The Commissioner of Commercial Taxes, (Now The Chief Commissioner of State Taxes) Government of Andhra Edupugallu-Vijayawada. Rradcsh,

The State of Andhra Pradesh, Rep by its Principal Secretary. Finance Department, Velagapudi, Amaravathi, Guntur Dist-A.P.

Union of India, Rep by its Principal Secretary, Ministry of Finance, 3 Floor, Jeevan Deep Building. Sansad Marg-New Delhi-110001 ( rd

The Commissioner of Commercial Taxes (Now The Chief Commissioner of State Taxes) Government of Andhra Pradesh, Edupugallu-Vijayawada.

The State of Andhra Pradesh, Rep by its Principal Secretary, Finance Department, Velagapudi, Amaravathi, Guntur Dist-A.P.

Union of India, Rep by its Principal Secretary, Ministry of Finance, 3 Floor, Jeevan Deep Building, Sansad Marg-New Delhi-110001. ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the Fligh Court may be pleased to issue any order or direction more particularly one in the nature of Writ of Mandamus or any other appropriate writ or order or direction declaring the Proceedings of the 1st respondent, passed under Rule 142 (5) R/w sec 73(9) of the AP State Goods and Service Tax Act 2017 in Form DRC-07 dated 18.04.2021 (Annexure P-1) for rejection of Transitional claim to the extent of credit available in final intimation form (Net 28 NCCF) (Annexure P-2) relying on the circular instructions of the Commissioner of Commercial Taxes A.P. is against to Rule 117 R/w Sec 140 (1),142(3) of the AP State Goods And Service Tax Act 2017 (hereinafter referred to Act' and also against to the theory of Doctrine of necessity (Mohapatra and the Act, Hence, the proceedings of the 1"’ respondent is liable to be set aside. 4 as 'the lA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to grant stay of all further proceedings, pursuant to the impugned Proceedings of the 1 Respondent, in Ref No. ZD370421001563V dated 18.04.2021 for rejection of the Transitional claim, pending disposal of the above writ petition, as otherwise, the petitioner would be put to severe loss and hardship.

The Commissioner of Commercial Commissioner of State Taxes) Government of Andhra Edupugallu-Vijayawada. Taxes, (Now The Chief Pradesh,

The State of Andhra Pradesh, Rep by its Principal Secretary, Finance Department, Velagapudi, Amaravathi, Guntur District-A.P. rd

Union of India, Rep by its Principal Secretary, Ministry of Finance, 3 Floor, Jeevan Deep Building, Sansad Marg-New Delhi-110001. .i ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the Fligh Court may be pleased to issue any order or direction more particularly one in the nature of Writ of Mandamus or any other appropriate writ or order or direction declaring the Proceedings of the 1®* respondent, passed under Rule 142 (5) R/w sec 73(9) of the AP State Goods and Service Tax Act 2017 in Form DRC-07 dated 18.04.2021 (Annexure P-1) for rejection, of Transitional claim to the extent of credit available in final intimation form (Net 28 NCCF) (Annexure P-2) relying on the circular instructions of the Commissioner of Commercial Taxes A.P. is against to Rule 117 R/w Sec 140 (1),142(3) of the AP State Goods And Service Tax Act 2017 (herein after referred to as 'the Act') and also against to the theory of 'Doctrine of necessity' (Mohapatra and the Act, Flence, the proceedings of the 1®' respondent is liable to be set aside. i lA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the Fligh Court may be pleased to grant stay of all further proceedings, pursuant to the impugned Proceedings of the 1st Respondent, in Ref No. ZD370421001565R dated 18.04.2021 for rejection of the Transitional claim, pending disposal of the PI above writ petition, as otherwise, the petitioner would be put to severe loss and hardship. lA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to receive the counter copies on record by allowing the leave petition in the above writ petition. I lA NO: 2 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant lay of all further proceedings, pursuant to the impugned Proceedings of the 1"' Respondent, in Ref No: ZD370421001565R dated 18.04.2021 for rejection of the Transitional claim, above writ petition, as otherwise, the petitioner would be and hardship. pending disposal of the put to severe loss Counsel for the Petitioner: (in All Cases) SRI K.ADI SIVA VARA Counsel for the Respondent (In All Cases) No.1 & 2: GP FOR PRASAD COMMERCIAL TAX Counsel for the Respondent (in All Cases) No.3: GP FOR FINANCE AND PLANNING SRI Y.V.ANIL KUMAR, ADVOCATE (SC FOR CENTRAL GOVERNMENT) Counsel for the Respondent (in All Cases) No.4: The Court made the following: COMMON ORDER

The common issues in these cases is that the petitioners who are dealers registered under the Andhra Pradesh Value Added Tax Act, 2005 [for the short “the AP VAT Act”] had certain outstanding credits in their account when the Andhra Pradesh Goods and Services Tax Act, 2017 [for the short the AP GST Act”] was brought into effect from 01.07.2017. The dealers who had credit balances, arising out of unused input tax, were permitted to transfer the said credit balances under the AP GST Act and the said credit so obtained could be used by the dealers for adjusting against the tax payable by them. The petitioners, along with other dealers, had applied for transfer of credits available in their ledgers under the Form Tran-1 and the said Forms were accepted and the tax credit available in their ledgers under the AP VAT Act were transferred to their ledgers under the AP GST Act.

Subsequently, it appears that an audit objection were raised that the tax credit available in the ledgers of the petitioners under the AP VAT Act as on 02.06.2014, at the time of the bifurcation of the State, cannot be transferred from the AP VAT regime to the AP GST regime as Section 56 of the Andhra Pradesh Reorganisation Act, 2014 only permits a refund. On the basis of this audit objection, the 1^* respondent reversed the credit transfer to the extent of the credit balance available, in the ledgers 4. 4 of the petitioners, as on 02.06.2014 and raised demands for payment of the said taxes. Aggrieved by the said action of the respondent, the petitioners 5. have approached this Court by way of these Writ Petitions. 1®' respondent had filed a counter affidavit, in which it is stated 6. that the tax credit available to the petitioners as on 02.06.2014 could not have been taken into account, as the dealer could have taken benefit of the said tax credit by seeking refund of the said amount under Section 56 of the Andhra Pradesh Reorgainsation Act, 2014. It also pointed out that the final intimation Form (Net 28 NCCF) issued in relation to the tax credit available to the each of the petitioners, as on 02.06.2014, had also contained a note, which stated that if the provisional net tax amount is not availed by the petitioners, by end of March-2016, then the petitioners would have to request the STO/AC for refund of the same subject to refund audit.

The controversy in the present case is whether the tax credit available in the ledgers of the petitioners, as on 02.06.2014, on account of unused input tax, can be transferred to the AP GST regime or the only option available to the petitioners was to seek a refund of the same. The entire controversy revolves around Section 56 of the Andhra

Pradesh Reogranisation Act, 2014 which reads as follows:-

This provision relates to the liability of the Successor State, relating to refund of taxes which are been collected in excess of the liability of the tax payer. The tax credit available in the ledgers of the petitioners is input tax credit, which is not tax paid in excess. Consequently, the provision of the Section 56 of the Andhra Pradesh Reogranisation Act, 2014 would not be applicable in the present cases. ./

One CC to Sri Y.V.Anil Kumar, Advocate [OPUC]

Two CCS to GP for Finance and Planning, High Court of Andhra Pradesh [OUT]

Two C.D Copies. MBT Taxes, (Now the Chief