M/S Sharmanji Yarns PVT LTD vs. Additional Director General, Gurugram And Ors

Held

The Court held that the applications for unblocking of input tax credit and refund of money should be decided by the competent authority by passing a speaking order. The Court reasoned that the respondents' counsel could not deny the logic of this argument. The petitioner's counsel stated they would be satisfied if the competent authority decided these applications by providing an opportunity of hearing within a reasonable time. Consequently, the Court directed Respondent No. 3 to decide the claim of unblocking of input tax credit within three weeks from the date of the order, after giving the petitioner an opportunity for hearing. The petitioner was directed to appear before Respondent No. 3 on 15.11.2021. For the refund claim, the petitioner was directed to appear before Respondent No. 4 on 15.11.2021. The writ petition was disposed of with these directions.

Facts

The petitioner, M/s Sharmanji Yarns Pvt. Ltd., filed a writ petition before the High Court of Punjab and Haryana challenging the non-action of the respondents regarding their claims for unblocking of input tax credit and refund of money allegedly coercively deposited. The petitioner had moved a representation dated 08.02.2021 for unblocking of input tax credit and a refund application dated 19.10.2020 for the refund of money. The respondents, including the Additional Director General, Gurugram, and others, were represented. The court considered the applications for placing on record certain letters as evidence.

Key Issues

1. Whether the competent authority should decide the petitioner's applications for unblocking of input tax credit and refund of money by passing a speaking order, as per Section 54 of the CGST Act, 2017, and relevant rules? The petitioner argued that their hard-earned money has been lying with the respondents without justification and sought a decision on their applications within a reasonable time, with an opportunity for hearing. The respondents, through their senior counsel, did not deny the logic of deciding these applications by the competent authority with a speaking order. No specific arguments were recorded for the respondents regarding the necessity of a speaking order or the delay in deciding the applications.