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SGST High Court Cases

GST - Sections 2(62), 2(63), 50 & 140 of the CGST Act, 2017 - Carry forward of excess Cenvat Credit in Form GST TRAN-I, Interest and penalty on Transitional credit carried forward - Petitioner carried forward transitional Cenvat credit in Form GST TRAN-1 under the GST regime. Upon verification, it was found that certain amount of credit was ineligible - Authorities levied interest under Section 50(3) and penalty under Section 122(2)(b) of the CGST Act, 2017 on the excess credit claimed - Whether the transitional Cenvat credit carried forward by the petitioner can be considered as 'input tax credit' under the GST Act, thereby attracting the provisions of Section 50(3) for levy of interest. HELD - Though the definition of 'input tax' and 'input tax credit' under the CGST Act does not specifically cover Transitional credit, the provisions of Section 140 which allow the carry forward of Cenvat credit from the erstwhile regime into the GST regime indicate that such Transitional credit would fall within the scope of 'input tax credit' for the purposes of levy of interest under Section 50(3) - the credit available as per the existing law in form of Cenvat credit or any other input tax credit, would fall within the scope of “input tax credit” under the CGST Act - The petitioner had wrongly availed and utilized the excess Transitional credit, and therefore, the authorities were justified in levying interest under Section 50(3) of CGST Act - The impugned order is modified by upholding the levy of interest under Section 50(3) but setting aside the imposition of penalty under Section 122(2)(b) of the CGST Act - The petition is partly allowed
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