Vaibhav Global Limited vs. Union Of INDIA

Held

The Court held that the petitioner failed to make out a case for invoking the extraordinary writ jurisdiction under Article 226 of the Constitution of India. It was noted that the petitioner did not respond to the show cause notice, even after the dismissal of their stay petition in DBCWP No.4465/2021. Despite the lack of a response, the authority passed a detailed speaking order that examined all possible pleas, including the petitioner's entitlement under Section 54 of the CGST Act, which was negated. The Court found that the determination regarding the petitioner's entitlement under Section 54 of the Act was not a jurisdictional aspect and that the petitioner had to question the validity of this determination through the statutory remedy of appeal under Section 107 of the CGST Act. The Court relied on the settled parameters for invoking writ jurisdiction, even in the presence of an alternative remedy, citing Godrej Sara Lee Ltd. (supra). Therefore, the writ petition was dismissed, with the petitioner being granted liberty to avail the remedy of appeal.

Facts

The petitioner, Vaibhav Global Limited, filed a writ petition challenging an order dated 30.10.2023 passed by the respondents. This order confirmed a demand of IGST amounting to Rs. 3,33,89,976, which was claimed as a refund but allegedly wrongly claimed. The petitioner argued that the demand was based on a wrong premise, as they were entitled to the refund under Section 54 of the CGST Act, 2017, by claiming the benefit of Rule 96(10) of the CGST Rules. The respondents contended that a show cause notice was issued on 22.03.2022, to which the petitioner failed to respond, despite the dismissal of a stay petition in a previous writ petition (DBCWP No.4465/2021). The authority, however, passed a detailed order considering all issues.

Key Issues

1. Whether the petitioner is entitled to claim a refund of IGST amounting to Rs. 3,33,89,976 under Section 54 of the CGST Act, 2017, by availing the benefit of Rule 96(10) of the CGST Rules, despite the respondents' contention that the claim was wrongly made? Petitioner's contention: The petitioner argued that the proceedings and the resultant demand were based on a wrong premise. They asserted their eligibility for the refund under Section 54 of the CGST Act and claimed they had rightly claimed the refund, making the respondents' action unjust. They relied on Godrej Sara Lee Ltd. vs. The Excise and Taxation Officer-cum-assessing Authority & Ors. (AIR 2023 SC 781). Respondents' contention: The respondents argued that the petitioner did not file any response to the show cause notice issued on 22.03.2022. They further submitted that the impugned order is appealable under Section 107 of the CGST Act and that no case has been made out to bypass this alternative remedy. They contended that the authority had exhaustively considered all issues, including the petitioner's entitlement under Section 54 of the Act, and negated the same.