On Amalgamation Refund Allowed Only for ITC Actually Transferred

Case Details: Alstom Transport India Ltd. vs. Additional Commissioner, CGST and Central Excise - [2026] 182 taxmann.com 827 (Gujarat)

Judiciary and Counsel Details

A.S. Supehia & Pranav Trivedi, JJ.
Sujit Ghosh, Sr. Adv., Ms Mannat Waraich, Ms Anshika Agarwal, Shrey Bhatt & Aditya J. Pandya, Advs. for the Petitioner.
Param V. Shah for the Respondent.

Facts of the Case

The petitioner was formed by the amalgamation of three entities, including an erstwhile company. The erstwhile company transferred nearly 80% of unutilized input tax credit (ITC) to the petitioner through FORM GST ITC-02, retaining the remainder. A refund application under the category ‘ITC accumulated due to Exports of Goods/Services without payment of Tax’, which was allowed by the competent authority. The petitioner later claimed refund of the remaining unutilized ITC of the erstwhile company, asserting that since the amalgamation transferred all rights and liabilities to the petitioner, it was entitled to refund under Section 54(3). The matter was accordingly placed before the High Court.

High Court Held

The High Court held that on amalgamation, the business and adventure of the transferor company would transfer to the new company as per the sanctioned scheme, and the transferor was not restricted from transferring the entire unutilized ITC. The Court interpreted Section 18(3) and Rule 41(1) in their fundamental sense, emphasizing that the enabling mechanism for transfer of unutilized ITC cannot be used in a way. Since the transferor company continued to file GSTR-3B returns and availed ITC after the effective date, the ITC rights and liabilities were crystallized in its electronic credit ledger, and the transferee could claim the ITC only if it was transferred as prescribed. Consequently, the petitioner could not claim refund of the retained unutilized ITC.

List of Cases Reviewed

Chief Commissioner of Central GST v. Safari Retreats (P.) Ltd. [2024] 167 taxmann.com 73/106 GST 250/90 GSTL 3 (SC)(para 63)
Pr. CIT v. Mahagun Realtors (P.) Ltd. [2022] 137 taxmann.com 91/443 ITR 194/287 Taxman 566 (para 65) followed
Government of Kerala v. Mother Superior Adoration Convent [2021] 126 taxmann.com 68/376 ELT 242 (SC)(para 68)
Hari Vishnu Kamath v. Syed Ahmad Ishaque (1954) 2 SCC 881 (para 69)
Administrator Municipal Committee Charkhi Dadari v. Ramji Lal Bagla (1995) 5 SCC 272 (para 70), distinguished

List of Cases Referred to

Tonbo Imaging India (P.) Ltd. v. Union of India [2023] 148 taxmann.com 487/97 GST 709/73 GSTL 200 (Karnataka) (para 21)
Marcowagon Retail (P.) Ltd. v. Union of India [2025] 175 taxmann.com 791 (Gujarat) (para 21)
Union of India v. VKC Footsteps India (P.) Ltd. [2021] 130 taxmann.com 193/52 GSTL 513 (SC) (para 21)
Government of Kerala v. Mother Superior Adoration Convent [2021] 126 taxmann.com 68/376 ELT 242 (SC) (para 22)
Padmasundara Rao v. State of Tamilnadu [2002] 37 SCL 425 (SC) (para 25)
Hari Vishnu Kamath v. Syed Ahmad Ishaque (1954) 2 SCC 881 (para 28)
Administrator Municipal Committee Charkhi Dadari v. Ramji Lal Bagla (1995) 5 SCC 272 (para 28)
Chief Commissioner of Central GST v. Safari Retreats (P.) Ltd. [2024] 167 taxmann.com 73/106 GST 250/90 GSTL 3 (SC) (para 34)
Pr. CIT v. Mahagun Realtors (P.) Ltd. [2022] 137 taxmann.com 91/443 ITR 194/287 Taxman 566 (SC) (para 64).