Shree Shakambari Ferro Alloys PVT. LTD. vs. Union Of INDIA And 2 Ors.

Held

The Court held that the respondents are estopped from urging the objection of limitation regarding the petitioner's application for a special rate of value addition. The Court reasoned that the submission made by the Department, as recorded in the order dated February 26, 2021, which had attained finality and was not assailed by the Department, implicitly accepted that the matter would be considered on merits. If the Department had intended to assert that the belated application could not be entertained, it should have canvassed that ground during the previous proceedings. By not raising this objection and making a submission that implied consideration on merits, the Department induced the petitioner to accept the same. Therefore, the respondents are bound by their submission and must consider the application for determination of the special rate of value addition in accordance with law, irrespective of when the application was made. The Court noted that a communication dated June 1, 2021, from the Commissioner of Goods and Services Tax, Shillong, indicated a determinable value addition rate of 81.9% for the petitioner's goods. Accordingly, the Court directed the respondents to affirm or alter this determination within four weeks from the date of the order.

Facts

The petitioner, Shree Shakambari Ferro Alloys Pvt. Ltd., filed a writ petition challenging the GST authorities' failure to settle its accounts regarding a special rate of value addition, as agreed in a previous High Court order dated February 26, 2021. The dispute stems from a notification (No.30/2008-C.E.) that allowed manufacturers to apply for a special rate of value addition if their actual value addition exceeded a specified percentage. The petitioner had applied for such a rate. The respondents (Union of India & ors) contended that the petitioner's application was belated. The previous order of February 26, 2021, had accepted a statement from the respondents that they would settle the petitioner's accounts within three months, adjusting the amount towards the demand notice, and no coercive action would be taken until then. The present petition was filed because this settlement did not occur.

Key Issues

1. Whether the respondents are estopped from raising the objection of limitation regarding the petitioner's application for a special rate of value addition, given their submission in the order dated February 26, 2021, which implied acceptance of the matter being considered on merits? 2. Whether the respondents are bound by their submission recorded in the order dated February 26, 2021, to consider the petitioner's application for determination of the special rate of value addition in accordance with law, irrespective of when the application was made? Petitioner's Arguments: The petitioner argued that the respondents are estopped from raising the objection of limitation because their submission in the February 26, 2021 order, which was accepted by the petitioner, implied that the matter would be considered on merits. The petitioner was induced by this submission to accept it, hoping for a determination in accordance with law. Therefore, the respondents are bound by their previous submission and should consider the application irrespective of the delay. Revenue/State's Arguments: The respondents contended that the petitioner's application for a special rate of value addition was made long after the period stipulated in the notification of June 10, 2008. They filed an additional affidavit focusing on the order of February 26, 2021, attempting to avoid their obligation under it.