Page 137 - GSTL_18th June 2020_Vol 37_Part 3

2020 ] IN RE : SIGMA ELECTRIC MANUFACTURING CORPORATION P. LTD. 351
to or from each other during the period commencing on the date from
which the order takes effect till the date of the order, then such transactions
of supply and receipt shall be liable to pay tax accordingly.
(2) Notwithstanding anything contained in the said order, for the purpos-
es of this Act, the said two or more companies shall be treated as distinct
companies for the period upto the date of the said order and the registra-
tion certificates of the said companies shall be cancelled with effect from the
date of the said order.
Further, as per Rule 41 of the CGST Rules, 2017
(1) A registered person shall, in the event of sale, merger, de-merger,
amalgamation, lease or transfer or change in the ownership of business for
any reason, furnish the details of sale, merger, de-merger, amalgamation,
lease or transfer of business, in FORM GST ITC-02 electronically on the
common portal along with a request for transfer of unutilized input tax
credit lying in his electronic credit ledger to the transferee :
Provided that in the case of de-merger, the input tax credit shall be appor-
tioned in the ratio of the value of assets of the new units as specified in the
demerger scheme.
Explanation - For the purpose of this sub-rule it is hereby clarified that the
“value of assets” means the value of the entire assets of the business,
whether or not input tax credit has been availed thereon].
(2) The transferor shall also submit a copy of a certificate issued by a prac-
ticing chartered accountant or cost accountant certifying that the sale, mer-
ger, de-merger, amalgamation, lease or transfer of business has been done
with a specific provision for the transfer of liabilities.
(3) The transferee shall, on the common portal, accept the details so fur-
nished by the transferor and, upon such acceptance, the unutilized credit
specified in FORM GST ITC-02 shall be credited to his electronic credit
ledger.
(4) The inputs and capital goods so transferred shall be duly accounted
for by the transferee in his books of account.
8. Thus, as per provisions of Section 87 of CGST Act, 2017and Rule 41
of CGST Rules, 2017, the GSTIN of M/s. Sigma Electric Manufacturing Corpora-
tion Private Ltd. having GSTIN No. 08AADCS9493H1ZS was required to be can-
celled after issuance of order dated 14-9-2017 of Company Law Tribunal for
amalgamation and they were required to do their entire activities under the new
entity i.e. M/s. Sigma Electric Manufacturing Private Ltd., having GSTIN No.
08AAXCS4352F1ZW. As per Rule 41 of CGST Rules, 2017 they were also re-
quired to transfer their unutilized credit to the new entity. The appellant neither
cancelled their GSTIN by filing FORM REG-16 with effect from the date of order
for amalgamation nor transferred their unutilized credit in FORM GST ITC-02 to
new GSTIN, thus failed to follow the procedure as prescribed under Section 87 of
CGST Act, 2017 read with Rule 41 of CGST Rules, 2017. Since the appellant has
not followed the procedure as prescribed under the Act/Rules/Circular as men-
tioned supra, they are not entitled for refund and rightly rejected by the adjudi-
cating authority.
9. In view of the above legal provision and discussions and findings, I
hereby reject the appeals filed by the appellant and upheld the impugned orders
passed by the adjudicating authority.
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GST LAW TIMES  18th June 2020  137