Proviso Builders And Developers vs. Union Of INDIA Through The Secretary, Ministry Of Finance Dept.Of Revenue Govt. Of INDIA And Ors
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The petitioners, including Proviso Builders and Developers, AK Hi-tech Groups, Akshar Realtors, Neel Sidhi Realities, and Thalia & Gami Enterprises, filed writ petitions seeking a mandamus to direct the authorities to grant them the benefit of input tax credit (ITC). The High Court noted that no formal application for ITC had been made by the petitioners to the respondents, nor was there any record of rejection or response from the respondents. The petitioners were claiming the ITC for the first time through these writ petitions without any prior adjudication. The court also observed that the petitioners themselves admitted a lack of clarity in the respondents' stand and that the applicability of circulars would require an examination of factual positions.
Held
The High Court held that a writ of mandamus cannot be sought without a prior demand or application being made to the relevant authorities. The court found that the petitioners had approached the High Court directly for the grant of ITC without first making a formal application to the respondents and awaiting their decision, whether it be a grant, rejection, or a reasoned order. The court noted that the applicability of circulars and the resolution of factual disputes would require an initial application and a decision by the respondents. Therefore, the court decided that the appropriate course of action was to permit the petitioners to make a formal application to the respondents. The respondents were directed to consider and decide such applications within a specified period, and if the decision was adverse to the petitioners, they would be at liberty to pursue other available legal remedies. The court did not decide on the merits of the ITC claim itself.
Key Issues
1. Whether the High Court can entertain a writ petition seeking a mandamus for the grant of Input Tax Credit (ITC) when no prior application or demand has been made by the petitioner to the respondent authorities, and there is no rejection or adverse order on record from the respondents? (Question of law) Petitioner's contention: The petitioners argued that they were seeking the benefit of ITC and that the respondents had taken contrary stands, necessitating judicial intervention. They implied that the writ petition was a necessary step to seek redressal. Revenue/State's contention: The respondents did not explicitly argue against the maintainability of the writ petition on these grounds, but the court's observation highlighted the lack of a prerequisite procedural step. The court noted that the petitioners had directly filed petitions without making any formal claim or demand, which was a basic requirement for seeking a writ of mandamus.
AI-generated summary — verify with the full judgment below
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURI ICTION WRIT PETITION NO.82 OF 2021 Proviso Builders and Developers … Petitioner V/s. Union of India and ors. … Respondents WITH WRIT PETITION NO.83 OF 2021 AK Hi-tech Groups … Petitioner V/s. Union of India and ors. … Respondents WITH WRIT PETITION (ST.) NO.92474 OF 2020 Akshar Realtors … Petitioner V/s. Union of India and ors. … Respondents WITH WRIT PETITION NO.15413 OF 2022 Neel Sidhi Realities … Petitioner V/s. Union of India and ors. … Respondents WITH WRIT PETITION NO.1309 OF 2021 AND WRIT PETITION NO.5976 OF 2021 Thalia & Gami Enterprises … Petitioner V/s. Union of India and ors. … Respondents Priya Soparkar PRIYA RAJESH SOPARKAR RAJESH SOPARKAR Date: 2023.03.06 11:52:26 +0530
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--- Ms.Ritika Agarwal with Ms.Rachana Bhanushali i/by M/s ACE Legal, Advocate for the Petitioners. Mr.Pradeep S. Jetly, Senior Advocate alongwith Mr.J.B.Mishra, Ms. Maya Majumdar and Mr.Ashutosh Mishra, Advocates for the Respondents.
--- CORAM : NITIN JAMDAR AND ABHAY AHUJA, JJ. DATE : 22 FEBRUARY 2023. P.C.:- The Petitioners have sought a writ of mandamus to direct the authorities to grant to the Petitioner benefit of input tax credit.
After hearing the matter for some time it transpires that there is no application of the Petitioners made to the Respondents on record seeking the relief of grant of benefit of Input Tax Credit (“ITC”) and neither there is any rejection or response of the Respondents on record. Therefore, the Petitioner is claiming these amounts for the first time by filing the Writ Petition in this Court without making any claim/application. It is basic that if a writ of mandamus is sought first demand for the right needs to be made. Without making any formal demand and without is being adjudicated, the Petitioners have directly filed these petitions.
Also as per the case of the Petitioners themselves there is no clarity emerging from the stand of the Respondents in the reply Priya Soparkar
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affidavit. According to the Petitioners, the Respondents have taken contrary stands. As to which the circulars have to be made applicable to the Petitioners would entail examination of factual positions. Therefore, if an application is made by the Petitioners setting out the facts and if the Respondents reject the same relief relying on a particular provision of law or any Circular, then the occasion would arise for challenging that particular Circular or the position of law.
It is during the course of the hearing, when a query was asked as to why the Petitioners have not made a demand or grievance, a letter dated 22 September 2022 is sought to be tendered. The Petitioners are pending since the year 2020 onwards and the letter is of 22 September 2022. This is also not a letter as indicated by us as above but a response to a summons issued. Even this letter is also not part of the record.
In this position, the appropriate course of action would be to permit that the Petitioners make a formal application/request to the Respondents in respect of the claim in this Petition and thereafter, the Respondents to consider and decide the same and if the decision is adverse to the Petitioners leaving it open to the Petitioners to adopt such remedies.
Accordingly, we dispose of the Petitions granting liberty to the Petitioners to make an application in respect of the claim. If such an application is made within a period of three weeks from today, the Priya Soparkar
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Respondents will decide the said application by a reasoned order within a period of six weeks thereafter. It is open to the Respondents, if found necessary, to give audience to the Petitioners’ representatives.
Needless to state that if the decision is adverse to the Petitioners, it is open to the Petitioners to adopt such remedies as may be available in law.
The Writ Petitions are disposed of in the above terms. (ABHAY AHUJA, J.)
(NITIN JAMDAR, J.) …. Priya Soparkar
Reproduced from the public record of the Bombay High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.