Shiva Industries Th Vinay Mahajan vs. Union Of INDIA Th Secretary Ministry Of Commerce And Others

Held

The Court held that the rejection of part of the petitioner's refund claim by the Deputy Commissioner, CGST Division, Samba, was contrary to the clear and unambiguous language of Notification dated 05.10.2017. The Court found that the petitioner, being an eligible unit, was entitled to budgetary support calculated at 58% of the central tax paid through debit in the cash ledger and 29% of the integrated tax paid, after utilization of input tax credit. The Court noted that the CGST/IGST considered for this calculation should be as paid on value addition prescribed in the rescinded exemption notifications and that the refund claims should not exceed the GST paid on value addition. The Court found no error in the petitioner's claim for Rs. 6,87,756/- for the July-September 2021 quarter and no good reason for rejecting the Rs. 1,678/- claim. Similarly, the rejection of Rs. 7,170/- for the January-March 2022 quarter was also deemed bad. The Court directed the respondent to release the amounts held inadmissible in the impugned orders.

Facts

The petitioner, Shiva Industries, is an industrial unit engaged in cement production. It is aggrieved by refund orders dated April 22, 2022, and June 23, 2022, issued by the Deputy Commissioner, CGST Division, Samba. These orders rejected parts of its refund claims filed under a budgetary support scheme notified on October 5, 2017. The petitioner was eligible for this scheme as it had availed benefits under earlier excise exemption notifications. The rejected amounts were Rs. 1,678/- for July-September 2021 and Rs. 7,170/- for January-March 2022. The petitioner contends the rejection is in violation of the October 5, 2017 notification, as the respondents did not provide reasons for the calculation leading to the rejection. The respondents stated that the rejected amounts were not supported by the budgetary support scheme.

Key Issues

1. Whether the rejection of part of the refund claim by the Deputy Commissioner, CGST Division, Samba, is in violation of Notification No. F.No.10(1)2017-DBA-II/NER dated 05.10.2017, concerning the budgetary support scheme for industrial units in Jammu & Kashmir? Petitioner's arguments: The petitioner argued that it had submitted refund claims strictly as per the budgetary support scheme notified on October 5, 2017. It contended that its eligibility for budgetary support was not disputed, and the partial rejection was based on calculations not disclosed to the petitioner, thus violating the notification. Revenue's arguments: The respondents argued that the budgetary support was limited to 58% of CGST and 29% of IGST paid through debit in the cash ledger, after utilizing input tax credit. They claimed the rejected amounts were in excess of what was supported by the budgetary support scheme, although the specific calculation method was not detailed in their objections.