M/S. Auroglobal Comtrade PVT. LTD., Bhubaneswar vs. Joint Comnr GST And Ce, Bhubaneswar, Commissionerate

Facts

The petitioner, Auroglobal Comtrade Pvt. Ltd., filed a refund application for Rs. 14,80,02,002/- for the tax period April 2022 to March 2023, claiming it as Input Tax Credit on export of goods without payment of Integrated Tax. A Show Cause Notice was issued proposing rejection due to short shipment, suggesting eligibility for only a proportionate refund. The petitioner admitted to claiming an inadmissible amount of Rs. 25,56,052/-. The Assistant Commissioner granted a refund of Rs. 14,54,45,950/-. Subsequently, the Commissioner, Goods and Services Tax, directed an appeal against this order. The Additional Commissioner (Appeals) upheld the refund granted by the Assistant Commissioner. Despite this appellate decision, the Joint Commissioner issued a Demand-cum-Show Cause Notice under Section 73 of the GST Act for adjudication concerning the same refund, which the petitioner challenged via a writ petition.

Held

The Court held that the Demand-cum-Show Cause Notice dated 25.09.2025 and the Summary Show Cause Notice dated 28.10.2025, issued by the Joint Commissioner under Section 73 of the GST Act, were inexplicable and therefore set aside. The Court reasoned that the issue of granting the refund by the Assistant Commissioner had already been finally decided on merits by the Additional Commissioner (Appeals). Applying the principles of res judicata and issue estoppel, as expounded in various judicial precedents, the Court found it unconscionable for the revenue to seek adjudication on the same objection/contention under Section 73 without giving due deference to the quasi-judicial appellate order. The Court emphasized that the recourse to Section 73 after a final decision by the appellate authority was improper. The Court allowed the writ petition, quashing the impugned notices.

Key Issues

1. Whether the Demand-cum-Show Cause Notice issued by the Joint Commissioner under Section 73 of the GST Act is maintainable when the issue of refund sanction had already been decided on merits by the Additional Commissioner (Appeals)? Petitioner's arguments: The petitioner contended that the issuance of the Demand-cum-Show Cause Notice by the Joint Commissioner under Section 73 of the GST Act was illegal, unjust, and a flagrant violation of the statute. They argued that the matter of refund sanction had already been adjudicated upon by the Additional Commissioner (Appeals), and the principles of res judicata and issue estoppel should apply, preventing re-agitation of the same issue. They relied on various judicial pronouncements regarding these principles. Revenue's arguments: The judgment does not explicitly record any arguments made by the revenue or opposite parties regarding the maintainability of the show cause notice or their stance on the principles of res judicata and issue estoppel.