Pdp Steels LTD vs. Union Of INDIA And 2 Ors.
Held
The Court directed that the demand-cum-show cause notice dated September 21, 2020, shall remain suspended until the returnable date of the connected writ petition, WP(C) No. 4046/2020. This interim relief was granted based on the petitioner's submission that similar interim orders had been granted to similarly situated petitioners. The Court did not decide the merits of the writ petition itself in this interlocutory application. The application was allowed and disposed of, providing interim protection to the petitioner against the recovery proceedings initiated by the respondent authorities.
Facts
The petitioner, PDP Steels Ltd., had received refunds of Education Cess and Secondary and Higher Education Cess, based on the Supreme Court's judgment in SRD Nutrients Private Limited. Subsequently, the Supreme Court in Unicorn Industries held that the SRD Nutrients and Bajaj Auto judgments were per incuriam, while Modi Rubber Limited and Rita Textile (P) Limited were binding. Following the Unicorn Industries judgment, the GST authorities issued a demand-cum-notice dated September 21, 2020, to the petitioner, deeming the earlier refunds erroneous and seeking recovery under Section 11(A)-1 of the Central Excise Act, 1954. The petitioner challenged this notice in a connected writ petition, arguing that refunds granted based on the law then in force could not be deemed erroneous due to a subsequent change in legal interpretation.
Key Issues
1. Whether refunds granted based on a Supreme Court judgment that was later declared per incuriam can be considered erroneous and subject to recovery under Section 11(A)-1 of the Central Excise Act, 1954? (Question of law) Petitioner's arguments: - The refund was granted based on the prevailing law as laid down by the Supreme Court in SRD Nutrients Private Limited at the time of the refund. - A subsequent change in legal interpretation, such as the Unicorn Industries judgment, cannot render a past refund erroneous, requiring the petitioner to repay the amount. Revenue's arguments: - The judgment in Unicorn Industries declared the SRD Nutrients and Bajaj Auto judgments per incuriam, making the earlier refunds illegal. - Recovery is permissible under Section 11(A)-1 of the Central Excise Act, 1954, for erroneous refunds.
Sections Cited
Section 11(A)-1
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Page No.# 1/5 GAHC010153262020
THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : I.A.(Civil) 1818/2020 1:PDP STEELS LTD A COMPANY INCORPORATED UNDER THE PROVISION OF THE COMPANIES ACT, 1956 AND HAVING ITS REGD. OFFICE AND FACTORY SITUATED AT BONDA, NARENGI, GHY-26, ASSAM, AND IN THE PRESENT PROCEEDING REP. BY SRI MISHRILAL RAJAK, THE AUTHORIZED SIGNATORY OF THE PETITIONER COMPANY VERSUS 1:UNION OF INDIA AND 2 ORS. REP. BY THE SECY. TO THE GOVT. OF INDIA, MINISTRY OF FINANCE, DEPTT. OF REVENUE, NORTH BLOCK, NEW DELHI 2:PRINCIPAL COMMISSIONER GST AND CENTRAL EXCISE COMMISSIONERATE GHY GST BHAWAN 5TH FLOOR KEDAR ROAD MACHKHOWA GHY-01 3:ASSTT. COMMISSIONER GHY DIVISION-II GST BHAWAN 2ND FLOOR KEDAR ROAD MACHKHOWA GHY-0 Advocate for the Petitioner : DR. A SARAF
Page No.# 2/5 Advocate for the Respondent : SC, GST Linked Case : WP(C) 4046/2020 1:PDP STEELS LTD A COMPANY INCORPORATED UNDER THE PROVISION OF THE COMPANIES ACT 1956 AND HAVING ITS REGD. OFFICE AND FACTORY SITUATED AT BONDA NARENGI GHY-26 ASSAM AND IN THE PRESENT PROCEEDING REP. BY SRI MISHRILAL RAJA
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