J And K Cement Corporation Th Sandeep Mittal vs. Union Of INDIA Th Secretary Ministry Of Commerce And Others

Held

The Court held that the rejection of a part of the petitioner's refund claim by the Deputy Commissioner, CGST Division, Samba, was contrary to the clear and unambiguous language of the Notification dated October 5, 2017. The Court found that the petitioner was an eligible unit and that its eligibility for budgetary support was not disputed, as evidenced by the sanction of the major part of its refund claim. The dispute centered on the determination of the budgetary support amount. Analyzing paragraph 5 of the Notification, the Court reiterated that eligible units are entitled to budgetary support calculated at 58% of the central tax paid through debit in the cash ledger and 29% of integrated tax paid, after utilization of input tax credit. The Court noted that the petitioner's CGST paid on value addition for the period January-March 2022 exceeded the refund claimed. Consequently, the rejection of Rs. 2,195/- was deemed bad and contrary to the notification. The Court directed the Deputy Commissioner to release the inadmissible amount.

Facts

The petitioner, J&K Cement Corporation, is challenging a refund order dated June 20, 2022, passed by the Deputy Commissioner, CGST Division, Samba. The petitioner was previously entitled to excise duty refunds under earlier notifications. Following the GST rollout, a budgetary support scheme was introduced via a notification dated October 5, 2017, to provide financial support to eligible industrial units in Jammu & Kashmir for a residual period. The petitioner, being an eligible unit, filed refund claims for July-September 2021 and January-March 2022. While the refund for July-September 2021 was allowed, a portion of the January-March 2022 claim, amounting to Rs. 2,195/-, was rejected without stated reasons. The petitioner contends this rejection violates the October 5, 2017 notification.

Key Issues

1. Whether the rejection of a part of the refund claim for the period January-March 2022, amounting to Rs. 2,195/-, by the Deputy Commissioner, CGST Division, Samba, is in violation of Notification No. F.No.10(1)2017-DBA-II/NER dated October 5, 2017, issued by the Ministry of Commerce & Industry, Department of Industrial Policy & Promotion. Petitioner's contention: The petitioner argues that the refund claims were filed strictly in accordance with the budgetary support scheme notified on October 5, 2017. They assert that their eligibility for budgetary support is not disputed, and the partial rejection was based on undisclosed calculations, violating the clear provisions of the notification. Revenue's contention: The official respondents contend that budgetary support is limited to 58% of CGST and 29% of IGST paid through debit in the cash ledger, after utilizing input tax credit. They state that the petitioner's claim for the excess amount was rejected as it was not supported by the budgetary support scheme, though the specific calculation method was not detailed in their objections.