BharatTaxGST

Ms Proxima Steel Forge PVT vs. Union Of INDIA And Others

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CWP/21975/2024HC Punjab and HaryanaGSTCNR PHHC01116719202403 October 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
AI SummaryRemanded

Facts

The petitioner, M/s Proxima Steel Forge Pvt. Ltd., filed a refund application for Rs. 2,02,09,111/-. This application was initially rejected by the Assistant Commissioner on grounds of limitation, citing a Circular dated 20.07.2021. The petitioner appealed this decision, and the Joint Commissioner, vide an order dated 29.08.2023, allowed the appeal, holding that the refund claim should not have been rejected as time-barred. The Joint Commissioner remanded the matter back to the proper officer for a fresh examination on merits, adhering to principles of natural justice. Subsequently, the Assistant Commissioner sought clarification from the Joint Commissioner, which was rejected. The Assistant Commissioner then again rejected the refund application as time-barred by an order dated 24.01.2024, prompting the petitioner to approach the High Court.

Held

The Court held that the Assistant Commissioner, Sewa Ram, had acted in insubordination by asserting his authority over the appellate order passed by the Joint Commissioner. The Joint Commissioner had explicitly directed that the refund application be treated as within time and decided on merits. The Assistant Commissioner's subsequent rejection of the application as time-barred, after the Joint Commissioner had already ruled on the limitation aspect, was found to be a direct defiance of the appellate authority's order. The Court characterized this as administrative chaos and a failure of the hierarchical system within the CGST administration. The ratio decidendi is that subordinate officers must strictly comply with appellate orders, and failure to do so warrants strict departmental action to prevent insubordination and maintain public faith in the appeal system. The Court set aside the Assistant Commissioner's order dated 24.01.2024 and directed the Commissioner to initiate major penalty proceedings against the Assistant Commissioner. Furthermore, the Commissioner was ordered to appoint another officer to decide the petitioner's refund application purely on merits within two months.

Key Issues

1. Whether the Assistant Commissioner, Sewa Ram, acted in insubordination by disregarding the appellate order of the Joint Commissioner and re-rejecting the refund application on the same grounds of limitation, thereby challenging the authority of the appellate authority? The petitioner argued that the Assistant Commissioner, a subordinate officer, failed to comply with the clear directions of the Joint Commissioner, who had already ruled that the refund application was not time-barred and should be decided on merits. This repeated rejection, despite an appellate order, demonstrated a "virtual failure of system of hierarchy" and administrative chaos. The respondents (Union of India and others) did not present any arguments on this specific issue as recorded in the judgment. The Court's focus was on the conduct of the subordinate officer.

Sections Cited

Section 161

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
CWP-21975-2024 - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 113 CWP-21975-2024 Decided on : 03.10.2024 M/s Proxima Steel Forge Pvt. Ltd. . . . Petitioner(s) Versus Union of India and others . . . Respondent(s) CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJAY VASHISTH PRESENT: Mr. J.S. Bedi, Advocate for the petitioner(s). Mr. Ajay Kalra, Sr. Standing Counsel for the respondent(s). **** SANJEEV PRAKASH SHARMA , J. (Oral) 1. A refund application was filed by the petitioner claiming refund of Rs.2,02,09,111/-. Said refund application was rejected by the then concerned Assistant Commissioner, on the ground of limitation stating that the refund application has been filed after a period of two years, as provided under the Circular dated 20.07.2021. 2. The appeal was preferred by the petitioner, which came to be allowed by the Joint Commissioner vide order dated 29.08.2023 and it was held as under:- “…. Thus, I hold that the refund claim should not have been rejected on the grounds of being time barred. Therefore, I remand back the instant matter to the proper officer to examine the refund application of the appellant afresh and on merits alone. The proper officer shall pass a detailed speaking, order after going through the submissions of the appellant and he shall adhere to the principles of Natural Justice.. 4. In view of the above, I pass the following order:-

ORDER This impugned order is set aside and the appeal filed by JAWALA RAM 2024.10.03 18:01 I attest to the accuracy and authenticity of this document

CWP-21975-2024 the appellant is allowed conditionally mentioned in Para 3.2 supra.”

3.

The Assistant Commissioner, one Sewa Ram, again heard the application and passed an order, wherein, he mentions a letter sent to the Joint Commissioner seeking clarification or order in appeal, dated 14.12.2023. The Joint Commissioner answered his letter dated 14.12.2023 on 29.12.2023, and rejected the same treating it as beyond the scope of Section 161 of the CGST Act. Thereafter, the concerned Assistant Commissioner has again rejected the refund application being time barred vide his order dated 24.01.2024. 4. In the circumstances, the petitioner has approached this Court challenging the order passed by the Assistant Commissioner dated 24.01.2024. 5. Taking notice of the fact that the Assistant Commissioner in his order dated 24.01.2024, notices that the Joint Commissioner had rejected his application for seeking rectification/clarification of the order passed in appeal, still proceeds to again dismiss the appeal on the ground of limitation, we directed the Commissioner to file an affidavit as to what steps have been taken against his subordinate, who has challenged his authority. However, no affidavit has been filed by him.

6.

We find that the Assistant Commissioner seems to be asserting his authority over and above the order passed in appeal by the Joint Commissioner, who has already observed that the application has to be treated within time and has to be decided on merits. However, Assistant Commissioner, a subordinate officer has refused to examine the case on merits and again dismissed the application as time barred. Such an approach adopted by the subordinate officer is the result of the virtual failure of system of hierarchy in the CGST.

7.

If subordinate officers do not comply with the appellate orders, it JAWALA RAM 2024.10.03 18:01 I attest to the accuracy and authenticity of this document

CWP-21975-2024 would be something sort of administrative chaos. Such officers are required to be dealt with by the Department in a strict manner, so that they may not create a precedent for others to start insubordination. It also reflects in general public faith in filing appeals, which would be wavered if the appellate orders are not complied with. Litigation is also forced unnecessarily before this Court. Such insubordination requires to be dealt with more strictness.

8.

Accordingly, we direct the Commissioner to take appropriate departmental action against the concerned Assistant Commissioner, Sewa Ram, for his insubordination, by initiating proceedings for major penalty. We dispose of this writ petition by setting aside the order of Assistant Commissioner dated 24.01.2024 and at the same time, direct the Commissioner to appoint another officer to deal with the application relating to refund of the petitioner, who would decided it purely on merits within a stipulated period of two months. Misc. application(s), if any, also stand disposed of. (SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE October 03, 2024 Mohit goyal

1.

Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No JAWALA RAM 2024.10.03 18:01 I attest to the accuracy and authenticity of this document

Reproduced from the public record of the Punjab and Haryana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.