Varstreet Software INDIA Private LTD. vs. The Assistant Commissioner Of State Tax And Anr

Held

The Court held that all four impugned orders were vitiated by a non-application of mind. The Court found that the orders were similarly worded and, in some instances, accepted the Petitioner's submissions and evidence, acknowledging compliance with Rule 89(4) of the GST Rules, 2017, and the allowability of refund claims under Section 54(1) of the GST Act, 2017. However, the operative parts of these orders contradicted these findings by disallowing or partly allowing the appeals without sufficient reasoning. Consequently, the Court quashed and set aside all four orders. The matter was remanded to Respondent No. 2 for de novo consideration by an officer other than U. D. Londhe. The Petitioner is to be given a personal hearing at least seven working days after receiving notice. The Court explicitly stated it made no observations on the merits of the matter and noted the absence of a constituted GST Tribunal.

Facts

The Petitioner, Varstreet Software India Pvt. Ltd., challenged four orders dated January 22, 2021, passed by U. D. Londhe, Deputy Commissioner of State Tax (Appeals), Pune. The Petitioner contended that the orders demonstrated a non-application of mind as they were similarly worded, accepted the Petitioner's submissions, but disallowed the appeals in the operative part. The Respondent, represented by Ms. S. D. Vyas, attempted to defend the orders. The Court noted that in one order, the adjudicating authority explicitly accepted the Petitioner's contention regarding compliance with Rule 89(4) of the GST Rules, 2017, and found the refund claim under Section 54(1) of the GST Act, 2017, to be allowable, yet the operative part stated the appeal was partly allowed. In other orders, the Respondent acknowledged the Petitioner's entitlement to make zero-rated supplies and seek refund of unutilised Input Tax Credit, but lacked sufficient reasoning.

Key Issues

1. Whether the impugned orders passed by the Deputy Commissioner of State Tax (Appeals) demonstrate a non-application of mind, thereby vitiating the decision-making process, concerning the Petitioner's refund claims under Section 54(1) of the GST Act, 2017, and compliance with Rule 89(4) of the GST Rules, 2017? Petitioner's arguments: The Petitioner argued that the orders were similarly worded, accepted their submissions, but paradoxically disallowed their appeals in the operative part. This indicated a lack of genuine consideration of their contentions and evidence. They highlighted specific instances where the adjudicating authority acknowledged compliance with procedural law and the allowability of refund claims, yet the final outcome contradicted these findings. Revenue's arguments: Ms. S. D. Vyas, appearing for the Respondents, made an effort to defend the impugned orders. However, the judgment notes that she ultimately could not sustain the orders.