Gulf Oil Lubricants INDIA LTD. vs. The Union Of INDIA Thru The Secretary, Ministry Of Law And Justice And Anr

Held

The High Court observed that the prayers concerning the challenge to Rule 117 of the CGST Rules, 2017, and the consequential relief of carrying forward credit under Section 140(1) of the CGST Act had become infructuous, citing Supreme Court orders in Union of India and Anr. vs. FILCO Trade Centre Pvt. Ltd. & Anr. Therefore, the Court did not adjudicate on these specific issues. The remaining substantial issues for adjudication were the Petitioner's challenge to the validity of para 2(1)(d)(i) (EEC) of the Service Tax Rules, 1994, as substituted by Notification No. 16/2017-ST dated April 13, 2017, and the consequential claim for a refund of Rs. 48,36,805/-. Additionally, the Court considered the challenge to the order dated February 27, 2023, in Writ Petition (Stamp) No. 16446 of 2023, which sought credit of Rs. 43,06,561/-. However, instead of adjudicating these remaining issues, the Court decided to dispose of both petitions with liberty to the Petitioner to file a fresh consolidated petition to address all intended challenges in a single proceeding. All contentions of the parties were expressly kept open.

Facts

The Petitioner, Gulf Oil Lubricants India Ltd., filed Writ Petition No. 4997 of 2019 challenging Rule 117 of the Central Goods and Service Tax Rules, 2017, and seeking to carry forward transitional credit. The Petitioner also challenged a notification dated April 13, 2017, and sought a refund of Rs. 48,36,905/-. Subsequently, the Petitioner filed Writ Petition (Stamp) No. 16446 of 2023 challenging an order dated February 27, 2023, passed by the GST Officer, and seeking credit of Rs. 43,06,561/- in its electronic credit ledger. The High Court noted that the challenge to Rule 117 and the prayer for carrying forward credit were rendered infructuous based on Supreme Court orders in FILCO Trade Centre Pvt. Ltd. The Court observed that the order dated February 27, 2023, constituted a separate cause of action.

Key Issues

1. Whether Rule 117 of the Central Goods and Service Tax Rules, 2017, is ultra vires the Parent Act, and consequently, should be struck down? (Petitioner's contention: Yes, it is ultra vires. The Petitioner sought to carry forward credit under Section 140(1) of the CGST Act and revise its last return under service tax law.) 2. Whether para 2(1)(d)(i) (EEC) of the Service Tax Rules, 1994, substituted by Notification No. 16/2017-ST dated April 13, 2017, is ultra vires the Finance Act, 1994, and the Constitution of India, and if so, should the Petitioner be refunded Rs. 48,36,905/- with interest? (Petitioner's contention: Yes, it is ultra vires. The Petitioner sought a refund of the amount paid under this notification.) 3. Whether the order dated February 27, 2023, passed by the GST Officer, is liable to be quashed and set aside, and if so, should the Petitioner be credited with Rs. 43,06,561/- in its electronic credit ledger as transitional credit for service tax paid on reverse charge basis on April 27, 2018? (Petitioner's contention: Yes, the order should be quashed, and credit should be allowed.) Revenue's arguments were not recorded in the judgment.