Aqua Polymers Th Vikas Chopra 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 was in violation of the clear and unambiguous language of Notification dated October 5, 2017. The petitioner's eligibility was not disputed, and a major part of its refund claim was accepted. The Court found that paragraph 5 of the budgetary support scheme clearly outlines the calculation of budgetary support: 58% of CGST paid through debit in the cash ledger after utilizing input tax credit, and 29% of IGST paid similarly. The CGST/IGST considered should be on the value addition prescribed in the rescinded exemption notifications, and the refund should not exceed the GST paid on value addition. The Court found no error in the petitioner claiming Rs. 1,53,331/- for July-September 2021, as the CGST on value addition was more than the refund claimed. The Court held that the rejection of Rs. 48,640/- and Rs. 64,496/- for the respective periods was bad and contrary to the notification. The Deputy Commissioner was directed to release the amounts held inadmissible.

Facts

The petitioner, Aqua Polymers, an industrial unit, challenged refund orders dated April 1, 2022, and June 20, 2022, issued by the Deputy Commissioner, CGST Division, Samba. These orders partially rejected refund claims filed under the 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was eligible for this scheme as it had availed benefits under earlier excise exemption notifications that were rescinded. The petitioner filed refund applications for July-September 2021 and January-March 2022, claiming specific amounts. The Deputy Commissioner sanctioned partial refunds, rejecting Rs. 48,640/- for the first period and Rs. 64,496/- for the second, without providing reasons.

Key Issues

1. Whether the rejection of part of the petitioner's refund claims for budgetary support, as per notification dated October 5, 2017, is in violation of the said notification? (Question of law) Petitioner's arguments: The petitioner contended that its refund claims were submitted strictly in accordance with the budgetary support scheme. The eligibility of the petitioner to the benefit of budgetary support was not disputed by the revenue. The partial rejection was based on undisclosed calculations. The petitioner relied on Notification No. F.No.10(1)2017-DBA-II/NER dated 05.10.2017. Revenue's arguments: The respondents argued that the 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 stated that the petitioner's claim for excess amounts was rejected as it was not supported by the budgetary scheme. However, the objections did not detail the calculation method.