M/S. A P Farm Needs vs. The Assistant Commissioner (State Tax)

Held

The Court acknowledged the petitioner's grievance but noted that the petitioner's counsel conceded that the existing statutory enactments do not provide for the adjustment of input tax accumulated under the Andhra Pradesh Value Added Tax Act towards the Central Goods and Services Tax. In the absence of such a statutory provision, the Court stated it could not issue a writ directing such an adjustment. However, the Court directed the respondents to examine the petitioner's grievance and suggest a workable solution. The petitioner was advised to make a representation to Respondent No. 3. Respondent No. 3 was directed to consider the grievance and provide redressal within the framework of the statutory dispensation within two weeks of receiving the representation and communicate the decision to the petitioner. The writ petition was disposed of subject to these observations and directions.

Facts

The petitioner, M/s. A.P. Farm Needs, sought to adjust its input tax credit of Rs. 24,49,521/- accumulated as of June 30, 2017, under the Andhra Pradesh Value Added Tax Act, towards its output tax liability under the Central Goods and Services Tax Act, 2017, effective from July 1, 2017. Alternatively, the petitioner requested a refund of half of this amount (Rs. 12,24,760/-) with interest, to enable them to pay it again under CGST on opening stock. The respondents are the Assistant Commissioner (State Tax) and other revenue authorities. The writ petition was filed before the High Court of Andhra Pradesh.

Key Issues

1. Whether the action of the respondent authorities in not permitting the petitioner to adjust the input tax credit carried forward as on 30.06.2017 towards the output tax payable from 01.07.2017 onwards under the Central Goods and Services Tax Act, 2017, is arbitrary, illegal, and confiscatory in nature? (This issue turns on the interpretation of the transitional provisions of the GST regime, specifically regarding the carry-forward of input tax credit from the pre-GST regime to the GST regime under the CGST Act, 2017). Petitioner's contention: The petitioner argued that they should be allowed to adjust their accumulated input tax credit towards their GST liability. The alternative prayer sought a refund to facilitate payment under CGST. Revenue's contention: The learned counsel for the petitioner fairly conceded that the statutory enactment in force does not envisage the adjustment of input tax accumulated under the Andhra Pradesh Value Added Tax Act towards the Central Goods and Services Tax. No specific arguments were recorded for the revenue.