Madras High court Order

Madras HC allows assessee's writ petition, holds that assessee can carry forward accumulated credit of Education Cess (EC), Secondary and Higher Education Cess (SHES) and Krishi Kalyan Cess (KKC) through filing of GST TRAN-1; Noting that as per Sec 140(1) (which provides for transfer of all credits and levies), there are only 3 conditions /embargos that bar the transfer of accumulated credit, holds that "the revenue has not made out any bar for the transitioning of EC, SHEC and KKC into the GST regime and the petitioner satisfies all conditions both under sub-section (1) and (8) of section 140"; Regarding Revenue's contention that as the cesses have been phased out and since there is no new liability to pay these cesses, no vested right can be said to exist in relation to the past accumulated credit in the light of Rule 3(7)(b) of the CENVAT Credit Rules, 2004, states that "The embargo placed by Rule 3(7)(b) is long gone with the introduction of GST"; Taking note of CBEC Circular dated December 07, 2015, observes that it "reveal a policy decision, not to allow utilization of accumulated credit of EC and SHEC, but nowhere states that the credit has lapsed"; Observes that credit continues to be available till is expressly stated to have lapsed, notes that however, there has been no instructions/notification/circular from the Board till date, stating the same, despite there being several occasions to do so; Holds that having permitted Petitioner to carry forward cesses without any move to state that the credits could not be so carried forward, since they had lapsed, "the provisions of Section 140 should be given full effect and meaning"; Relies upon SC ruling in case of Eicher Motors wherein SC reiterated that MODVAT Credit lying to the balance of an assessee represented a vested right accrued or acquired by the assessee: Madras HC



Sutherland Global Services Pvt. Ltd. vs. Assistant Commissioner CGST and Central Excise

The order was passed by Justice Anita Sumanth.

The assessee was represented by Advocate Raghavan Ramabadran along with Mr. Sai Prashanth and Ms. R. Charulatha (for Lakshmikumaran & Sridharan, Attorneys) while Revenue was represented by Ms. Aparna Nandakumar, Mr. M. Hariharan and Standing Counsel Mr. V. Sundareswaran.

Taxsutra Note:
Earlier today, we reported that copy of Madras HC ruling allowing credit transition of Education Cess and KKC into GST is now available on portal.