Shriram Power And Steel Private Limited Through Sri Roshan Kumar Sultania vs. Union Of INDIA Through The Secretary Ministry Of Finance

Facts

The petitioner, Shriram Power & Steel Private Limited, sought to utilize its credit balance of Rs. 1 Crore in its Personal Ledger Account (PLA) under the Central Excise Act, 1944, for payment of liabilities under the Central Goods and Service Tax (CGST) Act, 2017. The petitioner challenged a letter dated 12/14.12.2018 issued by the Assistant Commissioner, Central GST & Central Excise, Audit Circle, Ranchi, which presumably disallowed this utilization. The petitioner argued that 'cenvat credit' and 'Tax Credit' under Section 140 of the CGST Act, 2017, should encompass PLA balances. The respondents contended that the transitional provisions under Section 140 of the CGST Act, 2017, only permit the carry forward of Cenvat Credit to the Electronic Credit Ledger, not amounts deposited in the PLA. They suggested the petitioner could file a refund application.

Held

The Court took note of the submissions made by both parties and the stand taken by the respondents in their counter affidavit. Without commenting on the merits of the petitioner's claim, the Court observed that the petitioner expressed willingness to pursue the matter by making an appropriate application for refund before the competent authority. Consequently, the writ petition was disposed of with the direction that if such an application for refund is made by the petitioner, it may be considered in accordance with law. The Court did not make any definitive pronouncement on whether PLA credit can be utilized under GST or on the interpretation of Section 140 of the CGST Act, 2017, in relation to PLA balances, as the petitioner opted to pursue a refund.

Key Issues

1. Whether the credit balance of Rs. 1 Crore in the Personal Ledger Account (PLA) under the Central Excise Act, 1944, can be utilized for payment of liabilities under the Central Goods and Service Tax Act, 2017, as per the transitional provisions, specifically Section 140 of the CGST Act, 2017. Petitioner's contention: The petitioner argued that the terms 'cenvat credit' and 'Tax Credit' as mentioned in Section 140 of the CGST Act, 2017, and the Trans-I form, should include the credit available in the PLA account, allowing its transfer and utilization under the GST regime. Respondents' contention: The respondents argued that Section 140 of the CGST Act, 2017, specifically Chapter XX of the Act concerning transitional provisions, does not permit the carry forward of amounts deposited in the PLA. Only Cenvat Credit lying in favour of the petitioner could be carried forward to the Electronic Credit Ledger. They also suggested that the petitioner could file a refund application.