Hindustan Unilever LTD vs. The Union Of INDIA And 5 Ors

Held

The Court held that a communication dated 22.02.2023 from the Government of India, Ministry of Commerce and Industry, addressed to the Commissioner, CBIC, Department of Revenue, clarified the position. This communication stated that even for units that paid their tax dues under the earlier exemption notification dated 25.04.2007 by utilizing CENVAT credit, but had not yet reached the stage of paying further taxes by cash, they would be considered as having availed the benefits under the 2007 notification. The Court accepted this communication's contents, finding that it answered the issue before it. Consequently, the petitioner, being such a unit, would be entitled to all consequential entitlements and legal benefits of having availed the benefits under the 2007 notification. The respondent authorities were directed to take necessary action accordingly. The writ petition was closed, with liberty granted to the petitioner to approach again if advised.

Facts

The petitioner, Hindustan Unilever Ltd., filed a writ petition challenging the implication of utilizing CENVAT credit for taxes under an exemption notification dated 25.04.2007, in relation to a subsequent scheme dated 05.10.2017. The core issue was whether units that used CENVAT credit for taxes under the 2007 notification, but had not yet reached the stage of paying further taxes in cash, could be considered as having availed the benefit of the 2007 notification. The revenue authorities' stance on this determined the petitioner's entitlement to benefits under the 2017 scheme. The court considered a communication dated 22.02.2023 from the Government of India, Ministry of Commerce and Industry.

Key Issues

1. Whether units that utilized CENVAT credit for payment of taxes under the exemption notification dated 25.04.2007, but had not yet reached the stage of paying further taxes by cash, can be construed as having availed the benefit under the said notification, with reference to the subsequent scheme dated 05.10.2017? Petitioner's contention: The petitioner argued that such units should be considered as having availed the benefit of the 2007 notification, thereby entitling them to the benefits under the 2017 scheme. The crux of the argument revolved around the interpretation of 'availed the benefit' in the context of utilizing CENVAT credit before the point of cash payment. Revenue/State's contention: The judgment does not explicitly record the revenue or State's arguments. However, the court's decision implies that the revenue authorities' interpretation was being examined, and the communication dated 22.02.2023 clarified this stance.