Tack Exim PVT LTD vs. Union Of INDIA And Another

Held

The Court held that while the revenue had raised a valid preliminary objection regarding the availability of an alternative remedy of appeal, the impugned orders were passed on a technical ground without applying mind to the merits of the refund claims. The Court noted the petitioner's submission that the deficiency arose from inadvertence and that no prejudice would be caused by allowing the petitioner to rectify the technical defect. Consequently, the Court decided to set aside the impugned orders conditionally. The condition was the payment of Rs. 50,000/- as costs by the petitioner within two weeks. Upon payment of costs, the petitioner was directed to appear before the Assistant Commissioner on or before December 15, 2021, and file the physical/hard copies of all refund applications along with proof of cost deposit. The Assistant Commissioner was then directed to decide the refund claims in accordance with law expeditiously, preferably within three months from the date of deficiency removal. The cost was to be paid to the High Court Legal Services Committee, Allahabad. The Court expressly left undecided the merits of the refund claims.

Facts

The petitioner, Tack Exim Pvt Ltd, challenged nine orders dated March 3, 2020, passed by the Assistant Commissioner, CGST, Division-II, Kanpur. These orders rejected the petitioner's applications for a refund totaling Rs. 1,11,08,416. The sole reason for rejection was the non-filing of physical/hard copies of the refund claims. The revenue raised a preliminary objection, stating that the petitioner had an alternative remedy of appeal. The petitioner argued that the orders were not based on the merits of the claim but on a technicality, and that a deficiency notice was served on an employee who inadvertently failed to rectify the issue. The petitioner sought to have the orders set aside or the matter remitted for a reasoned decision.

Key Issues

1. Whether the High Court should entertain a writ petition challenging refund rejection orders when an alternative remedy of appeal is available, particularly when the rejection is based on a technical ground rather than merits? (Mixed question of law and fact, turning on the principles of writ jurisdiction and alternative remedies). Petitioner's arguments: The petitioner contended that the impugned orders were not passed on the merits of the refund claims but solely on the technical ground of not filing physical copies. They argued that due to inadvertence by an employee, the deficiency was not removed, and no prejudice would be caused if the orders were set aside or remitted. They sought a reasoned decision on the refund claims. Revenue's arguments: The revenue raised a preliminary objection, arguing that the petitioner possessed an adequate remedy of appeal against the impugned orders and therefore, the writ petition should not be entertained.