M/S Red Coin Paper Product vs. Deputy Commissioner Of State Tax

Held

The Court, having heard the learned counsel for the parties and perused the materials on record, proposed to dispose of the writ application with a specific direction. The Court directed both the Deputy Commissioner of State Tax, Range-15, Surat, and the Assistant Commissioner of State Tax, Range-1, Surat, to examine the matter and pass an appropriate decision in accordance with the law within a period of 15 days from the date of receipt of the Court's order. Specifically, the Deputy Commissioner was instructed to ensure that the Assistant Commissioner gives effect to the communication dated 02/11/2018 (at page 75 of the paper book). The Court expressed hope that necessary orders would be passed without unnecessarily prolonging the litigation. The Court did not explicitly decide on the violation of Article 19(1)(g) but rather focused on directing the authorities to act. The issue of the exact amount in dispute was not explicitly quantified in the judgment.

Facts

The petitioner, M/s Red Coin Paper Product, a partnership firm engaged in manufacturing and trading paper products, filed a writ application before the Gujarat High Court. The petitioner sought a writ of mandamus directing the respondent authority, the Deputy Commissioner of State Tax, to pass an order in Form GST-PMT-03 for re-crediting rejected input tax credit amounts to their electronic credit ledger. This pertains to tax periods of May 2018, June 2018, and July 2018. The petitioner claims that despite affecting zero-rated sales and being entitled to a refund of utilized input tax credit under Section 54 of the CGST Act, the respondent authority has failed to take cognizance of their representations and pass the necessary orders, which they argue violates their fundamental rights. The procedural history involves representations made by the petitioner and a communication from the Deputy Commissioner to the Assistant Commissioner regarding the refund claim.

Key Issues

1. Whether the respondent authority's inaction in re-crediting the rejected input tax credit to the petitioner's electronic credit ledger for the tax periods of May, June, and July 2018, despite the petitioner's entitlement under Section 54 of the CGST Act and Rule 86(4) of the CGST Rules, 2017, is arbitrary and violative of Article 19(1)(g) of the Constitution of India? Petitioner's Arguments: - The petitioner contended that they had made zero-rated sales as per Section 16 of the IGST Act without payment of tax during the relevant periods. - They are entitled to a full refund of the utilized input tax credit under Section 54 of the CGST Act. - The respondent authority's failure to pass an order in Form GST-PMT-03 for re-crediting the rejected amount in the electronic credit ledger, as mandated by Rule 86(4) of the CGST Rules and Circular No. 59/33/2018-GST, amounts to inaction and a violation of their fundamental rights. - They relied on their representation dated 30/10/2018 and a communication dated 02/11/2018 from the Deputy Commissioner to the Assistant Commissioner, highlighting the lack of action. Respondent's Arguments: - The judgment records no specific arguments from the respondent.