Steel Authority Of INDIA Limited (Bokaro Steel Plant) Through Rajeev Gupta vs. The State Of Jharkhand Through The Commissioner Of State Taxes

Held

The Court held that the alleged rejection order (Order No. 91 dated 18.10.2019) is non-est in the eyes of law, being a non-existing order, as the Respondents themselves admitted its absence from official records. Furthermore, even if an order was passed, it was done in violation of the principles of natural justice and Rule 92(3) of the CGST Rules, as no opportunity of hearing was granted to the Petitioner. The Court found no reason to accept the Respondents' contention that the Petitioner should file a fresh application, as this would cause the Petitioner to lose the benefit of statutory interest under Section 56 of the CGST Act, to which they are entitled. The Court relied on the Supreme Court's decision in Union of India vs. Tata Chemicals, emphasizing the obligation to refund money received without right and the consequent right to interest. The Petitioner's claim for refund was directed to be processed based on its original application dated March 4, 2019, along with statutory interest at 6% per annum from 60 days after the application date until payment. The Respondents were directed to process the refund and interest within three weeks.

Facts

The Petitioner, Steel Authority of India Limited (Bokaro Steel Plant), filed a writ application seeking a refund of Rs. 2,90,86,294/- for unutilized Input Tax Credit (ITC) on exports for the period July 2017 to March 2018. The Petitioner had applied for this refund on March 4, 2019. The Respondent No. 3 (Deputy Commissioner of State Tax) initially sought clarifications, and later, an email dated October 27, 2019, indicated that the refund order RFD-06 had been submitted. The online portal also reflected the refund as sanctioned, awaiting payment advice (RFD-05). Despite repeated follow-ups for over two and a half years, the Petitioner was informed in April 2022 that the refund application was rejected by an order (RFD 01-B) dated October 22, 2019, referencing Order No. 91 dated October 18, 2019. However, the Petitioner was not supplied with this rejection order, and the Respondents admitted in their counter-affidavit that Order No. 91 dated October 18, 2019, is not available in official records.

Key Issues

1. Whether the writ application is maintainable when the Petitioner has a statutory remedy of appeal under Section 107(1) of the Goods and Services Tax Act, given that the Respondents claim the refund application was rejected? 2. Whether the purported rejection order (Order No. 91 dated 18.10.2019) is valid and has been properly communicated to the Petitioner, especially when the Respondents admit its non-availability in official records? 3. Whether the Petitioner is entitled to the refund of Rs. 2,90,86,294/- along with statutory interest, considering the circumstances of the alleged rejection and the Petitioner's claim of unutilized ITC on exports? Petitioner's arguments: The Petitioner contended that the rejection order is non-existent and was not provided, violating principles of natural justice. They argued that the online portal indicated sanction, and the delay in issuing payment advice was unexplained. They also argued that forcing them to file a fresh application would cause them to lose statutory interest. The Petitioner relied on the Supreme Court judgment in Union of India vs. Tata Chemicals regarding the right to interest. Respondents' arguments: The Respondents argued that the Petitioner has a statutory remedy of appeal under Section 107(1) of the GST Act and that the writ application is not maintainable as an appeal was not preferred. They also submitted that the Petitioner should file a fresh refund application, as the amount has been re-credited to their electronic credit ledger.