The State Of Bihar Through The Commissioner Of State Tax vs. Kaushlendra Kumar

Held

The Court allowed the civil review petition to the extent indicated. It acknowledged that Section 118 of the Finance (No.2) Act, 2024, which inserted sub-sections (5) and (6) into Section 16 of the CGST Act, has been given effect from July 1, 2017. Furthermore, Section 150 of the same Act prohibits refunds under certain circumstances related to the retrospective application of Section 118. The Court noted that the recovery process was initiated on December 29, 2022, and the amount was deposited on July 9, 2023. Considering these provisions, the Court directed the Appellate Authority to consider the relevant provisions of Sections 118 and 150 of the Finance (No.2) Act, 2024, while deciding the pending appeal. The claim for refund of Rs. 50,75,214/- was made subject to the final outcome of the appeal. The Court did not expressly leave any issue undecided.

Facts

The State of Bihar, through its tax authorities, filed a civil review petition seeking to review a previous judgment of the High Court. In the original writ petition (CWJC No.17860 of 2024), the Court had set aside an order of the appellate authority, directed the refund of Rs. 50,75,214/- to the writ petitioner (Kaushlendra Kumar), and ordered interest on the recovered amount. The State's review petition argued that Section 150 of the Finance (No.2) Act, 2024, which prohibits refunds of tax paid or ITC reversed if it wouldn't have been paid or reversed had Section 118 been in force, was not brought to the Court's attention. Section 118 of the Finance (No.2) Act, 2024, amended Section 16 of the CGST Act to allow ITC for certain financial years up to November 30, 2021, and in cases of registration cancellation and revocation. The State also highlighted a corresponding amendment to the Bihar Goods and Services Tax Act, 2017.

Key Issues

1. Whether Section 150 of the Finance (No.2) Act, 2024, read with Section 118 of the same Act, bars the refund of input tax credit (ITC) or tax paid in this case, given that these provisions were not brought to the Court's attention during the original writ proceeding? (Question of law) Petitioner's Arguments: The petitioners (State of Bihar) contended that Section 150 of the Finance (No.2) Act, 2024, was not brought to the Court's notice in the original writ petition. This section states that no refund shall be made of tax paid or ITC reversed if it would not have been paid or reversed had Section 118 been in force. They argued that Section 118, which provides for the availment of ITC for specific financial years and in cases of registration revocation, should have been considered. They also pointed to a similar amendment in the Bihar Goods and Services Tax Act, 2017. The petitioners sought a review of the previous order based on these provisions. Opposite Party's Arguments: No specific arguments were recorded for the opposite party (Kaushlendra Kumar) in the provided judgment excerpt regarding the review petition.