M/S. Omshanti Fertilizers vs. The Assistant Commissioner (State Tax)

Held

The Court noted the petitioner's concession that the statutory enactment in force pertaining to Goods and Services Tax does not envisage 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 specific provision, the Court held that it could not issue a writ directing such an adjustment. However, recognizing the petitioner's grievance, the Court directed the respondents to examine the issue and suggest a workable solution. The petitioner was instructed to make a representation to Respondent No. 3. Within two weeks of receiving this representation, Respondent No. 3 was directed to consider the petitioner's grievance and provide a redressal within the framework of the statutory dispensation, communicating its decision to the petitioner. The writ petition was disposed of subject to these observations and directions. The interim relief application was disposed of as infructuous.

Facts

The petitioner, M/s. Omshanthi Fertilizers, filed a writ petition challenging the action of the respondent authorities in not allowing them to adjust the input tax credit of Rs.19,57,117/- accumulated as on June 30, 2017, under the Andhra Pradesh Value Added Tax Act, 2005, towards their output tax liability under the Central Goods and Services Tax Act, 2017, from July 1, 2017, onwards. The petitioner sought a direction to permit this adjustment, or alternatively, a refund of half the amount with interest. The tax period in question is the transition from the pre-GST regime to the GST regime, commencing from July 1, 2017. The order under challenge is the inaction of the respondent authorities in permitting the adjustment of the carried forward input tax credit.

Key Issues

1. Whether the petitioner can adjust the input tax credit accumulated under the Andhra Pradesh Value Added Tax Act, 2005, as on June 30, 2017, towards their output tax liability under the Central Goods and Services Tax Act, 2017, from July 1, 2017, onwards? (Question of law, concerning the transition provisions of GST legislation). Petitioner's contention: The petitioner argued that they should be allowed to adjust the input tax credit of Rs.19,57,117/- available as on June 30, 2017, towards their output tax payable from July 1, 2017, under the CGST Act, 2017, simultaneously with the output tax payable under the APGST Act, 2017. Alternatively, they sought a refund of half the amount with interest. The petitioner's counsel conceded that the statutory enactment does not explicitly provide for such an adjustment. Revenue's contention: The respondents did not explicitly argue against the petitioner's claim but rather awaited the court's decision. However, the concession by the petitioner's counsel implies that the revenue's position would be that such an adjustment is not statutorily permissible.