M/S Console Shipping Services INDIA PVT. LTD. vs. Union Of INDIA Through Secretary, Ministry Of Finance, Department Of Revenue & Ors.

Facts

The petitioner, M/s Console Shipping Services India Pvt. Ltd., filed a writ petition seeking directions to carry forward CENVAT credit of Rs. 13,94,961/- and interest of Rs. 8,98,763/- into their Electronic Credit Ledger under GST, to be reflected in their GST 3B return. During the pendency of the petition, the petitioner was granted CENVAT credit of Rs. 10,36,932/-, but the input tax credit for the balance amount of Rs. 3,57,477/- was rejected. The remaining issue concerned interest on the delayed carry forward of the admitted CENVAT credit amount of Rs. 10,36,932/-.

Held

The Court disposed of the writ petition by directing the respondents to treat the petition as a representation for the grant of interest on the alleged delayed carry forward of CENVAT credit. The respondents were directed to pass a speaking order within four weeks from the date of the judgment. The Court noted that the petitioner was granted CENVAT credit of Rs. 10,36,932/-, and the input tax credit for the balance amount of Rs. 3,57,477/- was rejected. The primary remaining issue was the interest on the delayed carry forward of the admitted credit. The respondents argued that Section 56 of the CGST Act, which deals with interest on delayed refunds, does not apply automatically and that an application would be necessary. The Court opted to have the respondents consider the matter by treating the petition as a representation, avoiding the need for a separate application and further litigation.

Key Issues

1. Whether the petitioner is entitled to interest on the delayed carry forward of CENVAT credit amounting to Rs. 10,36,932/- under the Goods and Services Tax regime, considering it was a transitional period issue under Section 140 of the Central Goods and Services Tax Act, 2017? Petitioner's contention: The petitioner sought directions for the respondents to permit carry forward of CENVAT credit and interest. During the proceedings, the focus shifted to interest on the delayed carry forward of the admitted credit. Respondents' contention: The respondents argued that the carry forward occurred during the transitional period under Section 140 of the CGST Act. They contended that there is no automatic payment of interest as stipulated under Section 56 of the Act on delayed refunds. However, they submitted that if an application for interest is filed by the petitioner, the Department would pass an appropriate order in accordance with law.