M/S. North East Glass Industries vs. The Union Of INDIA And 4 Ors.

Held

The Court held that the Assistant Commissioner GST & CX Division-I, Guwahati, had erred in calculating the refund amount by applying a 36% rate instead of the 50% mandated by the Supreme Court's order and the High Court's subsequent clarification. The Court found that the calculation in the impugned order dated 31.05.2018 was not based on the Supreme Court's requirement of refunding 50% of the amount due. Therefore, the Court directed the Assistant Commissioner to recalculate the refund amount, ensuring that 50% of the due amount is considered. The Assistant Commissioner was also instructed to provide an opportunity for a hearing to the petitioner and allow them to submit relevant documents before passing a reasoned order. The entire exercise was to be completed within one month of receiving a certified copy of the order. The ratio decidendi is that interim orders of the Supreme Court, especially those concerning financial relief to a class of entities, must be strictly adhered to by subordinate authorities, and any deviation requires proper justification and adherence to procedural fairness.

Facts

The petitioner, M/s. North East Glass Industries, sought 100% exemption from excise duties under the North East Industrial Policy of 2007. The respondent authorities issued Notifications dated 27.03.2008 and 10.06.2008, reducing the refundable excise duty to 36%. This reduction was challenged, and a Division Bench of the High Court set aside these notifications on 20.11.2014. The Union of India appealed to the Supreme Court, which, on 07.12.2015, stayed the High Court's order subject to the release of 50% of the due amount to industrial units. Subsequently, on 01.12.2016, the High Court clarified that this 50% refund requirement was universally applicable. The petitioner then challenged an order dated 31.05.2018 by the Assistant Commissioner GST & CX Division-I, Guwahati, which calculated a refund of Rs. 8,62,377/- but used a 36% rate instead of the mandated 50%.

Key Issues

1. Whether the calculation of the refund amount for the petitioner should be based on 50% of the due amount as mandated by the Supreme Court's interim order and subsequent clarification by the High Court, or on the 36% rate applied by the Assistant Commissioner. Petitioner's contention: The petitioner argued that the refund should be calculated based on the 50% interim relief granted by the Supreme Court and clarified by the High Court, as their entitlement to a refund was established. They contended that the Assistant Commissioner's order incorrectly applied the 36% rate, deviating from the Supreme Court's directive. Revenue's contention: The revenue authorities, represented by the Assistant Commissioner, had calculated the refund at 36%, as reflected in their order dated 31.05.2018. The judgment does not explicitly record separate arguments from the revenue regarding the 50% mandate, but their action implies a disagreement or misinterpretation of the Supreme Court's order.