Prism Johnson Limited vs. Union Of INDIA

Held

The Court found that the consequential orders declining the refund, while potentially cryptic, contained sufficient reasons in the remarks column to inform the petitioner of the grounds for rejection. These reasons, including 'Refund claim is time barred,' 'Neither ITC of cess availed in GSTR3B nor accumulated of ITC of cess is available in Credit Ledger for relevant period,' and 'The refund is inadmissible on the anvil of para 43 of Circular No.125/44/2019-GST dated 18.11.2019,' were deemed sufficient to save the orders from being non-speaking and violating principles of natural justice. The Court declined to delve into other reasons provided by the revenue, such as the admissibility of the claim on merits or the correct category for the refund application, in light of the unavailed alternative statutory remedy. The Court held that the petitioner should avail the remedy of appeal under Section 107 of the CGST Act, 2017. The Court directed that if the appeal is filed within 60 days from the date of the order, it shall be considered and decided on its own merits without being dismissed on limitation alone. The writ petitions were dismissed with this liberty.

Facts

The petitioner, Prism Johnson Limited, filed two writ petitions challenging show cause notices and consequential orders that refused their claim for a refund of accumulated credit of compensation cess. The petitioner argued that the refund was legally due and wrongly denied, and that the orders were non-speaking. The revenue contended that the refund claim was time-barred under Section 54(14)(2) of the CGST Act, 2017, and also untenable under Section 16(4) of the CGST Act, 2017. The revenue further argued that the petitioner did not avail input tax credit of compensation cess on coal for the financial years 2017-18 and 2018-19, and that the refund application was filed under the wrong category. The revenue also raised the issue of the petitioner's failure to avail the statutory remedy of appeal under Section 107 of the CGST Act.

Key Issues

1. Whether the consequential orders refusing the refund claim are non-speaking orders, violating principles of natural justice, as argued by the petitioner? 2. Whether the refund claim is time-barred under Section 54(14)(2) of the CGST Act, 2017, as contended by the revenue? 3. Whether the refund claim is admissible under Section 16(4) of the CGST Act, 2017, and whether the petitioner availed input tax credit of compensation cess on coal for the financial years 2017-18 and 2018-19, as argued by the revenue? 4. Whether the refund application was filed under the correct category, as questioned by the revenue? 5. Whether the writ petitions are maintainable given the availability of the statutory remedy of appeal under Section 107 of the CGST Act, 2017, as raised by the revenue? Petitioner's arguments: The refund was legally due and wrongly denied; the consequential orders were non-speaking. Revenue's arguments: The refund claim was time-barred under Section 54(14)(2) of the CGST Act, 2017; it was untenable under Section 16(4) of the CGST Act, 2017; the petitioner did not avail input tax credit of compensation cess on coal for the relevant financial years; the refund application was filed under the wrong category; the writ petitions were not maintainable due to the unavailed statutory remedy of appeal under Section 107 of the CGST Act.