M/S Rungta And Sons Rungta Industries Compound Kashipur vs. Union Of INDIA

Facts

The petitioner, M/s Rungta and Sons, seeks a refund of ₹10,23,075/- paid as GST in 2017 for rejected wheat and paddy seeds purchased from Uttarakhand Seeds and Tarai Development Corporation Ltd. (the Corporation). The Corporation deducted this amount from the petitioner's security deposit. The petitioner's contention is that GST was not applicable to these rejected seeds as they were not sold in unit containers under a registered brand name, citing an advance ruling in M/s Sam Overseas. After the petitioner's representation was initially not addressed, this Court, in WPMS No. 1272 of 2020, directed the Corporation to decide the representation. The Corporation, by an order dated 16.10.2020, acknowledged the liability to refund but stated it had applied for refund from the State Tax Department without success.

Held

The Court held that the basic fact that GST was not payable on the transactions in question is not in dispute. Therefore, the department cannot be permitted to retain the amount any further. The Court directed the Corporation to move an application in the appropriate form (RFD-01 as per Rule 89) for the refund of the GST amount within two weeks of the order's communication. Upon such application, the department was directed to refund the amount to the Corporation forthwith. Subsequently, the Corporation was ordered to refund the amount to the petitioner within two weeks of receiving it from the department. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the petitioner is entitled to a refund of GST amounting to ₹10,23,075/- paid on the purchase of rejected wheat and paddy seeds in 2017, considering the nature of the goods sold and the applicability of GST provisions? Petitioner's arguments: The petitioner argued that GST was not leviable on the rejected seeds as they were not sold in unit containers or under a registered brand name, relying on the advance ruling in M/s Sam Overseas. Therefore, the amount deducted by the Corporation as GST should be refunded. Revenue's arguments: The respondent revenue contended that the advance ruling in M/s Sam Overseas is binding only on the applicant and the jurisdictional officer, and its benefit cannot be extended to the petitioner. The revenue also noted that the Corporation should have claimed the refund within the prescribed time period.