Autohaus Private Limited And Anr vs. The Assistant Commissioner, State Tax, Shibpur Charge And Ors

Facts

The petitioners, Autohaus Private Limited & Anr., filed a writ petition challenging an adjudication order and an appellate order concerning Electric Vehicles. They drew the court's attention to a Circular dated August 3, 2022, issued by the Government of India, Ministry of Finance. The petitioners contended that the impugned orders were contrary to this Circular and that they were entitled to a refund of excess GST collected. The State GST authority acknowledged that while the State Government had not yet issued a similar circular, it intended to do so shortly. The State's advocate suggested remanding the matter back to the Adjudicating Authority to consider the refund claim in light of the Central Government's Circular.

Held

The Court held that the impugned adjudication order and the order of the Appellate Authority were contrary to the Circular dated August 3, 2022, issued by the Government of India, Ministry of Finance. The Court accepted the submission of the State GST authority that the matter should be remanded. The reasoning was based on the acknowledgment by the State that a similar circular was forthcoming and the petitioners' reliance on the Central Government's Circular. The ratio decidendi is that where a government circular provides a benefit to assessees, subsequent orders that are contrary to such a circular should be reconsidered, especially when the state authority indicates an intention to align its policies with the central directive. The Court set aside the impugned adjudication order and the appeal order and remanded the matter back to the Adjudicating Authority. The Adjudicating Authority was directed to pass a fresh order within eight weeks from the date of communication, taking into consideration the benefit provided to the petitioners in the Circular dated August 3, 2022.

Key Issues

1. Whether the impugned adjudication order and the order of the Appellate Authority relating to Electric Vehicles are contrary to the Circular dated 3rd August, 2022, issued by the Government of India, Ministry of Finance, thereby entitling the petitioners to a refund of excess GST collected? (Question of law) Petitioner's Contention: The petitioners argued that the impugned orders were in direct contravention of the Central Government's Circular dated August 3, 2022, and therefore, they were entitled to a refund of the excess GST collected. They relied on this Circular to support their claim. Revenue/State's Contention: The State GST authority submitted that although the State Government had not yet issued a similar circular, it was in the process of doing so and intended to issue one shortly. They proposed that the matter be remanded to the Adjudicating Authority to consider the petitioners' refund claim in light of the aforementioned Circular.