SC refuses to entertain Centre’s plea for transfer of petitions from HCs on interpretation of CGST Act provision

By PTI

NEW DELHI: The Supreme Court Monday refused to transfer to itself the pleas pending in several high courts on interpretation of a provision of the Central Goods and Service Tax (CGST) Act relating to entitlement to the credit of any input tax in respect of supply of goods or services or both.

Declining to entertain the transfer plea of the Centre, a bench headed by Chief Justice N V Ramana said, “Let the High Court decide the issue first. If you are aggrieved by the verdict then come to us and we will settle the law.

“Let the high courts come out with the conflicting verdicts as well, we will have the benefit of their opinions.”

The bench, also comprising justices Surya Kant and Hima Kohli, requested the Madhya Pradesh High Court’s Indore bench to dispose of the plea on the interpretation of section 16(2) of the CGST Act within two months.

Solicitor General Tushar Mehta and Additional Solicitor General (ASG) S V Raju, appearing for the Centre, urged the bench that other high courts seized of similar cases be asked not to proceed with the hearing to avoid conflicting verdicts.

The top court asked the law officers to make a mention about its order to other high courts.

At the outset, the ASG urged for the transfer of a case from the MP HC to the top court saying around 36 similar cases are pending in several high courts.

Section 16 (2) of the CGST Act says: “Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless.”

The provision stipulates the conditions when a registered person becomes entitled for credit of input tax.

The Centre wanted transfer of a plea filed by M/S Cummins Technologies India Private Ltd in the Madhya Pradesh High Court.

Recently, the top court, in a significant verdict, has held that goods and the services under the CGST law and Rules cannot be treated at par for the purposes of refund of unutilised input tax credit (ITC), saying there is “no constitutional entitlement to seek a refund” as it is governed by the statute.

It had also upheld the validity of Section 54(3) of the Central Goods and Service Tax (CGST) Act, which deals with refund of unutilised ITC.