M/S Sunil Finishing Works vs. Union Of INDIA
Held
The Court held that the petitioner should be permitted to file a fresh application for refund. This decision was based on the retrospective amendment made to Rule 89(5) of the CGST Rules, 2017, which included 'Services' in the formula for calculating refunds. The Court reasoned that since the amendment was retrospective, it should apply to the petitioner's claim, even though their initial application was rejected before the amendment. The respondents were directed to decide the fresh application strictly in accordance with the retrospective amendment and other applicable laws. The GST portal was to be operated to facilitate this fresh application. The Court did not expressly leave any issue undecided.
Facts
The petitioner, M/s Sunil Finishing Works, sought a refund of GST paid on inputs due to an inverted duty structure. Their initial refund application was rejected. The petitioner contended that a subsequent retrospective amendment to Rule 89(5) of the CGST Rules, 2017, effective from July 1, 2017, which included 'Services' in the refund formula, should allow them to file a fresh application. The respondents, including the Union of India and the State of Rajasthan, agreed that the amendment warranted a fresh consideration of the refund claim. The GST Network also indicated willingness to open the portal if directed.
Key Issues
1. Whether the petitioner is entitled to claim a refund of GST on inputs due to an inverted duty structure under the second proviso to Section 54(3) of the CGST Act, 2017, considering the retrospective amendment to Rule 89(5) of the CGST Rules, 2017? Petitioner's Argument: The petitioner argued that the retrospective amendment to Rule 89(5) of the CGST Rules, 2017, which included 'Services' in the refund formula from July 1, 2017, should allow them to file a fresh refund application, as their original application was rejected prior to this amendment. They relied on the retrospective nature of the amendment. Respondents' Argument: The respondents agreed that the retrospective amendment to Rule 89(5) of the CGST Rules, 2017, justified a fresh consideration of the petitioner's refund application. They acknowledged that the amendment, by including 'Services' in the refund formula, impacted the eligibility criteria.
Sections Cited
Section 54(3), Rule 89(5)
AI-generated summary — verify with the full judgment below
[2024:RJ-JD:36465-DB] (1 of 3) [CW-16811/2018] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 16811/2018 M/s Sunil Finishing Works, Through Its Proprietor Shanti Lal Nahar, Aged 53 Years, Resident Of F-298 Mandia Road, Pali. ----Petitioner Versus
Union Of India, Through Its Commissioner Of Central Goods And Service Tax Department, Jodhpur.
Goods And Services Tax Network (Gstn), Aerocity, Gurgaon, New Delhi. Through Commissioner (Cgst)
State Of Rajasthan, Through Commissioner Of State Goods And Services Tax Department, Kar Bhawan, Jaipur.
The State Tax Officer, Ward-4, Kar Bhawan, Mandia Road, Pali. ----Respondents For Petitioner(s) : Mr. Sharad Kothari For Respondent(s) : Mr. Hemant Dutt Mr. Rajvendra Saraswat HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE MUNNURI LAXMAN Order 03/09/2024
This civil writ petition under Article 226 of the Constitution of India has been preferred claiming the following reliefs:- “It is, therefore, most respectfully prayed that this writ petition may kindly be allowed and- i. Hence, it is humbly prayed that the writ petition may be allowed and the respondent may be
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