M/S Coromandel International Limited Sidco Industrial Complex Bari Brahmana Jammu vs. Union Of INDIA Th Secretary Deptt Of Revenue Ministry Of Finance And Others

Held

The High Court held that the issuance of the clarification by the Finance Department of the UT of Jammu and Kashmir necessitated a revisit of the petitioner's claim by the Adjudicating Authority. The Court acknowledged the arguments presented by both parties and the subsequent clarification. The impugned order dated 02.02.2021 passed by Respondent No. 3 was quashed. The Court remanded the matters back to Respondent No. 3 with a direction to reconsider the entire issue afresh, taking into account the clarification issued by the Department of Finance bearing No. FD-ST/29/2022-03 dated 26.04.2022. The Adjudicating Authority was further directed to pass appropriate orders on merits after this reconsideration. The Court did not decide on the merits of the petitioner's calculation methodology but rather directed a re-examination based on the new clarification.

Facts

The petitioners, M/s Coromandel International Ltd., filed two writ petitions challenging an order dated 02.02.2021 passed by Respondent No. 3. The order rejected their claims for reimbursement under the Budgetary Support Scheme, notified by various government notifications. The petitioner sought reimbursement for the periods January 2020 to March 2020 and April 2020 to June 2020. The Adjudicating Authority rejected the claims on the grounds that the petitioner had unutilized Input Tax Credit (ITC) at the end of the quarter, and arbitrarily reduced the budgetary support by the amount of unutilized ITC. The petitioner contended that this rejection was contrary to the scheme's intent. During the pendency of the petitions, the Financial Commissioner of the UT of Jammu and Kashmir issued a clarification on 26.04.2022 regarding the determination of reimbursement amounts under the relevant SROs, addressing doubts about the calculation formula and erroneous rejections.

Key Issues

1. Whether the Adjudicating Authority erred in rejecting the petitioner's claim for budgetary support by calculating it on a quarterly basis instead of a monthly basis, specifically concerning the quantum of cash tax paid through the cash ledger account, contrary to the Budgetary Support Scheme? Petitioner's Arguments: The petitioner argued that the budgetary support should be calculated based on the cash tax paid monthly, not on a quarterly basis. They contended that the Adjudicating Authority's rejection, based on unutilized ITC at the end of the quarter, was arbitrary and contrary to the spirit of the Government of India's Budgetary Support Scheme. The petitioner relied on the subsequent clarification issued by the Financial Commissioner, UT of Jammu and Kashmir, which addressed doubts regarding the calculation formula and erroneous rejections, suggesting a need for reconsideration. Revenue's Arguments: The learned Advocate General, representing the Union of India and others, fairly submitted that the matters needed to be remanded and reconsidered afresh by the Adjudicating Authority in light of the clarification issued by the Department of Finance.