Section 140/142 of the CGST Act, 2017 – Transitional Credit – Credit of Service Tax paid after June, 2017- The appeal is filed by the Revenue assailing the order of the learned Judge dated 22.02.2022. The petitioner was pointed out by Audit to pay service tax along with applicable interest on royalty paid to the Govt. The petitioner was entitled for credit of service tax paid under RCM but since the petitioner made payment of service tax in December, 2017, they could not make any application under GST TRAN-1  for transfer of credit to the electronic credit ledger. They made application seeking refund under section 142 of the Act, which was rejected through the Order-in-Original No.19/2018 dated 24.09.2018. The court set aside the impugned orders and remitted the matters back to the respondents for reconsideration. The standing counsel for the appellant submitted that the assessee had not paid the appropriate service tax within the stipulated time and paid only in May 2018, thereby lost the opportunity of taking cenvat credit and hence, they resorted to refund of the service tax by filing refund claim under the transitional provisions under section 142. The court observed that the learned Judge, considering the peculiar circumstances of the case ordered the writ petition by setting aside the rejection order of the appellant and remanding back the matter to the appellant for fresh consideration, with certain directions, which are aggrieved by the appellant / Revenue. The court further observed that what was impugned is only the order of remand passed by the learned Judge and hence, there is no requirement to set aside the same in entirety. The order of the learned Judge is modified to some extent.

Held that:- The Hon’ble High Court modified the order by directing the appellant to consider the application of the assessee under section 142(3) of the Act based on the available materials and dispose the same, on merits and after affording an opportunity of hearing to the assessee, within a period of six weeks. The respondent shall consider and dispose of these applications under Section 142(3). The claim made by the petitioners need not be considered for the purpose of refund of the claim. However, the said claim made by the petitioners can be considered for the purpose of permitting the petitioners to carry forward the accrued credit to the electronic credit ledger. The necessary order shall be passed by the respondents within a period of six weeks.