Wednesday, November 30, 2022

Gujarat HC judge says going to the moon easier than making sense of GST regime

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Gujarat High Court Justice J.B. Pardiwala implored with a Central government counsel that the Court would wager going on a trip to the moon compared to understanding the policies and intricacies of the Goods and Service Tax (GST) regime.

On Friday, the bench of Justices Pardiwala and Nisha M. Thakore was hearing a plea by Bodal Chemical Limited on a GST matter where the petitioner was having a difficulty for filing return and utilising the credit which was filed by it earlier.

“It’s very easy for us to reach to moon, (Advocate) Mr Lodha. If someone would say Mr Pardiwala & Justice Thakore, would you like a trip to the moon? We would take a chance, but to understand your policies and your intricacies of your tax (GST), Oh God! With folded hands! We say it’s beyond our capacity to understand,” Justice Pardiwala said. 

Petitioner’s advocate A.S. Tripathi submitted: This is a case where we have filed our Tran-1 and the utilised input credit of Rs 20 lakh odd. Initially, when Tran-1 was filed the credit got transferred into new regime (GST). But as soon as the petitioner tried to file its GSTR six return which is the return filed by an ISD (Input Service Distributor), it was not showing in the system. Therefore, the petitioner was neither to file its return as ISD nor could utilise this Rs 20 lakh credit amount for distributing to other party.” 

Respondent Union of India Advocate Priyank Lodha submitted: “We are not averse to the proposition that they should get the benefit of credit. So far as the provisions of GST is concerned the petitioner is the ISD. His main role is to distribute all the invoices and the credit that is received with respect to those invoices for the services at different location given by them. As and when the credit is available to an ISD, the ISD has to distribute it further to the constituent units. Under GST, an ISD for the Credit accumulated in a particular month will have to be distributed in that particular month and cannot be carried further. In the present case, the petitioner should have, when the credit was accumulated as per the pre-GST regime, should have distributed it immediately to the constituent units and subsequently those units should have further transferred by filing Tran-1, should have transferred the credit into GST regime.” 

The petitioner submitted that the eligibility of this credit is not under the question. Their own joint commissioner has helped us, the counsel said. 

This is when Justice Pardiwala made the comment on taking a chance of going to the moon but not understanding the GST regime.

The Union of India advocate replied, “I would describe to milord what is the difference between a registered vendor and ISD.” 

Also read: Chhattisgarh High Court dismisses PIL against creation of new district

“The petitioner submits when we were filing difficulties in filing the tax, we have raised the query from the Deputy Commissioner. We haven’t received any response from him but joint commissioner has helped us to file a complaint on a portal again. Even the joint commissioner tried to raise request in our behalf.” 

“So in whose (court) the ball is,” asked Justice Pardiwala. 

“The department can help us, milord,” replied the petitioner’s counsel. 

“Make us understand, Mr Lodha, is he entitled to claim this, apart from this technicality?” 

Respondent replied, “Yes. It should have been transferred by the ISD Units not by ISD only,” he said. 

“Even the department is not disputing my legibility. I am supposed to distribute this credit to my units. There is no bar in transferring the credit from earlier regime to current regime. So raising the dispute to that it should have transferred in earlier regime and should have been carried forward. That’s too late for the same.” 

The bench reserved its orders. 

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