Ultratech Cement LTD vs. Union Of INDIA And Others

Held

The Court held that the Deputy Commissioner (Respondent No. 4) failed to properly consider the petitioner's plea that the input tax credit balance of Rs.10,25,03,817/- pertained to its Baga Unit, which was not an eligible unit under the budgetary support scheme, and not to the Bagheri Unit. The Court found that this credit balance was incorrectly utilized to reduce the budgetary support for the Bagheri Unit. Furthermore, the Court noted a violation of natural justice concerning the rejection of the claim for the third quarter (01.10.2017 to 31.12.2017), as no personal hearing was granted to the petitioner, and reasons for rejection were not adequately provided. The Court also set aside the order of the Commissioner (Appeals) for the third quarter, as it was based on the premise of no appellate mechanism. Consequently, the Court set aside the orders dated 27.07.2018 and 20.08.2018 passed by the 4th respondent and the order in appeal dated 29.07.2019, remitting the matter back to the 4th respondent for fresh consideration after providing a personal hearing to the petitioner. The 4th respondent is directed to pass orders within three months.

Facts

The petitioner, Ultra Tech Cement Ltd., engaged in cement manufacturing, operates two units in Himachal Pradesh under the same GSTIN. Following the introduction of the GST regime, the Central Government issued a "Scheme of Budgetary Support" on 05.10.2017 to compensate units that had residual exemption periods under the previous Central Excise Regime but became liable to pay GST. The scheme allowed for reimbursement of GST. A Circular dated 27.11.2017 prescribed procedures, including separate registration for each eligible unit even if operating under the same GSTIN. The petitioner's Bagheri Unit obtained registration, but its Baga Unit's application was rejected. The petitioner filed applications for budgetary support for the periods 01.07.2017 to 30.09.2017 and 01.10.2017 to 31.12.2017. The Deputy Commissioner (Respondent No. 4) rejected these applications, leading to the present writ petition challenging these rejections.

Key Issues

1. Whether the budgetary support under the scheme is unit-specific or GSTIN-specific, considering the petitioner operates multiple units under a single GSTIN? (Section 5.9.1 of Notification, Para 9(iii) of Circular dt. 27.11.2017). The petitioner argued that the scheme is unit-specific and that input tax credit from a non-eligible unit (Baga Unit) should not be considered for calculating the budgetary support for the eligible unit (Bagheri Unit). The revenue did not record specific arguments on this point. 2. Whether the Deputy Commissioner (Respondent No. 4) correctly considered the petitioner's plea regarding the credit balance of Rs.10,25,03,817/- pertaining to the Baga Unit and not the Bagheri Unit when determining budgetary support? The petitioner contended that this credit balance, belonging to a non-eligible unit, was incorrectly factored in. 3. Whether principles of natural justice, specifically the right to a personal hearing, were violated by the Deputy Commissioner (Respondent No. 4) in rejecting the budgetary support claims for the second and third quarters? The petitioner argued that no hearing was provided for the third quarter claim, and the reasons for rejection were not adequately assigned. The revenue did not record specific arguments on this point.