2020 (9) TMI 348 - HC - GST

Writ petition dismissed, statutory appeal available under Section 107. Pursue remedy through appellate process.

The Court deemed the writ petition not maintainable due to the availability of a statutory appeal under Section 107 of the Act. It emphasized that the ... Refund of unutilized input tax credit on account of inverted duty structure - availability of statutory remedy under Section 107 - judicial restraint where efficacious alternative remedy exists - non-speaking/cryptic order and failure to afford opportunity of hearing - examination of applicability of Central Board of Indirect Taxes and Customs Circular dated 04.09.2018Availability of statutory remedy under Section 107 - judicial restraint where efficacious alternative remedy exists - Writ petition not maintainable in view of the availability of an efficacious statutory remedy under Section 107 of the Act. - HELD THAT: - The Court accepted the opposite party's submission that the petitioner has a specific statutory appellate remedy under Section 107 which can be invoked to challenge the impugned order. Given the existence of that remedy, the High Court declined to exercise writ jurisdiction at this stage and observed that the grounds relied upon by the petitioner can be ventilated before the appellate forum in the statutory proceedings. The Court therefore refrained from interfering with the impugned order in exercise of extraordinary jurisdiction. [Paras 6]Writ petition not entertained; petitioner granted liberty to prefer appeal under Section 107.Non-speaking/cryptic order and failure to afford opportunity of hearing - examination of applicability of Central Board of Indirect Taxes and Customs Circular dated 04.09.2018 - Direction to the appropriate appellate authority to consider the appeal and examine applicability of the CBIC Circular dated 04.09.2018 within a stipulated time-frame. - HELD THAT: - Although the High Court did not set aside the impugned order on merits, it observed the petitioner's grievance that the order was cryptic and passed without affording opportunity of hearing. Instead of adjudicating those contentions itself, the Court granted the petitioner liberty to file an appeal under Section 107 and directed that if the appeal is filed within 15 days with a copy of this order, the appellate authority shall decide it in accordance with law within three months. The appellate authority is to examine the applicability of the Central Board's Circular dated 04.09.2018 while adjudicating the matter. [Paras 7]If appeal is filed within 15 days with a copy of this order, the appellate authority shall decide it within three months, examining the CBIC Circular dated 04.09.2018.Final Conclusion: The writ petition was not entertained because an efficacious statutory remedy under Section 107 exists; the petitioner was granted liberty to prefer an appeal within 15 days and, if so filed, the appellate authority is directed to decide the appeal within three months after examining the applicability of the CBIC Circular dated 04.09.2018. Issues:Prayer for setting aside Assistant Commissioner's order rejecting refund of unutilized ITC due to inverted duty structure and direction for a reasoned order. Maintainability of writ petition against availability of statutory appeal under Section 107 of the Act. Validity of non-speaking order and lack of opportunity of hearing.Analysis:1. Prayer for Setting Aside Order: The petitioner, a fertilizer manufacturer, sought direction to quash the Assistant Commissioner's order rejecting the refund of unutilized Input Tax Credit (ITC) due to an inverted duty structure. The petitioner contended that most inputs and input services attracted a higher GST rate compared to outward supplies, entitling them to the refund. The Assistant Commissioner issued a show-cause notice proposing the refund rejection, to which the petitioner replied. However, the Assistant Commissioner passed the impugned order without considering the petitioner's response, prompting the petitioner to challenge the order for lack of reasoning and non-application of mind.2. Maintainability of Writ Petition: The Senior Standing Counsel for CGST and Central Excise argued that the petitioner had an alternative statutory remedy under Section 107 of the Act to appeal the order. Therefore, the writ petition was deemed not maintainable. The petitioner did not contest this point but highlighted the void nature of the non-speaking order passed without affording an opportunity of hearing, emphasizing the need for a reasoned decision.3. Validity of Order and Opportunity of Hearing: Both parties acknowledged the availability of a statutory appeal for challenging the order. The Court, considering the submissions, opined that the petitioner should pursue the remedy under Section 107 of the Act to address the legality and validity of the order. The Court noted that the petitioner failed to establish grounds for interference through a writ petition that could be raised before the Appellate Authority. Consequently, the Court disposed of the writ petition, granting the petitioner liberty to challenge the order under Section 107 of the Act.4. Disposition and Future Course: The Court disposed of the writ petition, advising the petitioner to utilize the statutory appeal mechanism under Section 107 of the Act within 15 days. The Appellate Authority was directed to examine the applicability of the Circular dated 04.09.2018 while disposing of the appeal within three months. Additionally, due to the ongoing COVID-19 lockdown, the petitioner's counsel was permitted to use the soft copy of the order available on the High Court's website for necessary actions.