2024 (2) TMI 657 - HC - GST

Disability Rights Triumph: GST Concession Certificate Reinstated, Policy Fairness Upheld for Applicant's Benefit

Arun Goel Versus Union of India And Anr.

HC quashed the order declining a GST Concession Certificate for a person with disability. The court directed respondents to reconsider the application ... Seeking GST Concession Certificate so that they can avail of a concessional rate of GST and seek a refund for the GST paid on the purchase of a vehicle. - Declination to accept the recommendation made by the Chief Commissioner of Persons with Disabilities by his order dated 06.04.2023 - HELD THAT:- The petitioner submits that the applicants were permitted refund of duty even after the vehicle was purchased and there was no mandatory requirement of obtaining an entitlement certificate before purchase, which has only been introduced in the 2019 policy. Learned counsel further submits that respondents have even permitted similar refund pertaining to applications made before the 2019 policy was notified - Be that as it may, since the application of the petitioner was submitted before the policy was amended, the same was liable to be considered under the 2018 policy and could not have been returned on 24.10.2019. Petitioner had also approached the Chief Commissioner of persons with Disabilities and the Commissioner by order dated 06.04.2023 had issued directions to the Respondent to apply the 2018 policy but by order dated 05.06.2023, the Respondents have held that the said policy is not applicable. The order dated 05.06.2023 of the Respondents is not sustainable - this petition is disposed of, directing the respondents to consider the application of the petitioner dated 17.08.2019 in terms of the 2018 policy. ISSUES PRESENTED AND CONSIDERED 1. Whether an application for GST concession submitted before amendment of the governing policy must be considered under the policy in force on the date of submission, or may be returned and required to be re-submitted under the subsequently amended policy. 2. Whether respondents were justified in returning and refusing to consider an application dated 17.08.2019 on the ground that the policy had been revised on 24.10.2019 and a Ministry of Finance notification dated 30.09.2019 amended the relevant Schedule. 3. Whether, in the event an earlier policy applies, the applicant is entitled to issuance of a concession certificate and refund of excess GST collected, and the appropriate remedy and directions to the respondents. ISSUE-WISE DETAILED ANALYSIS Issue 1: Applicability of the policy in force on date of application Legal framework: Administrative action on benefit schemes and concessions is governed by the terms of the policy or guidelines in force. Principles of prospective application of statutory or regulatory changes and protection of legitimate expectations apply where an application is submitted prior to amendment. Precedent Treatment: The Court relied on established administrative-law principles (as applied in the reasoning) that an application must be considered under the policy operative at the time of submission; no contrary precedent was relied upon from the record. Interpretation and reasoning: The Court found that the petitioner's initial application (01.07.2019) and the subsequent re-submission (17.08.2019) were both made while the 2018 policy remained in force. The Ministry's notification amending the Schedule was dated 30.09.2019 and the revised policy was issued on 24.10.2019; therefore those later instruments could not retrospectively render the 2018 policy inapplicable to applications already submitted. Returning the application on 24.10.2019 with a direction to re-apply under the revised guidelines was inconsistent with the temporal applicability of the 2018 policy. Ratio vs. Obiter: Ratio - An application submitted before amendment of governing policy must be considered under the governing policy as it stood on the date of submission. Obiter - Remarks about administrative proposals under consideration were not decisive. Conclusions: The Court held that the application dated 17.08.2019 was liable to be considered under the 2018 policy and could not lawfully be returned for re-submission under the 2019 policy. Issue 2: Validity of respondents' ground for returning application and refusal to accept Chief Commissioner's recommendation Legal framework: Administrative decisions refusing to consider or accepting recommendations from competent authorities must adhere to the applicable policy and must not be arbitrary. Where a superior authority (Chief Commissioner) issues directions consistent with the operative policy, subordinate authorities must follow unless justified reasons within the policy permit otherwise. Precedent Treatment: The Court treated the Chief Commissioner's directions as relevant administrative guidance; no authority was overruled or distinguished on record. Interpretation and reasoning: The respondents asserted that an amendment was under consideration and that a notification and revised guidelines required fresh applications. The Court rejected this because the material chronology showed the amendment post-dated the petitioner's application(s). Furthermore, the Chief Commissioner had directed application of the 2018 policy; respondents' subsequent refusal to accept that recommendation by order dated 05.06.2023 was inconsistent with the Court's finding on temporal application and therefore unsustainable. Ratio vs. Obiter: Ratio - Respondents cannot decline to accept a recommendation to apply the earlier policy where the application predates the amendment; administrative measures in the interregnum do not justify returning timely applications. Obiter - Observations regarding respondents having permitted refunds in analogous earlier cases are illustrative but not foundational to the legal holding. Conclusions: The respondents' action in returning the application and later declining to follow the Chief Commissioner's direction was held to be not sustainable; the order refusing the recommendation was quashed. Issue 3: Entitlement to concession certificate and refund if found eligible under 2018 policy; remedy and directions Legal framework: If an applicant satisfies eligibility under the policy in force at the time of application, administrative authorities must issue the concession certificate and make refund of excess tax collected, subject to procedural compliance and entitlement criteria set out in that policy. Precedent Treatment: The judgment applies standard remedial principles - quashing unlawful administrative orders and directing reconsideration under the correct legal framework - without purporting to expand or limit precedent beyond the facts. Interpretation and reasoning: Given the Court's finding that the 2018 policy applied, the appropriate remedial outcome is to direct respondents to consider the 17.08.2019 application under those terms. If entitlement is established under the 2018 policy, the respondents must issue the concession certificate and refund excess GST, including consideration of claims made post-purchase where the 2018 policy permitted such relief. Ratio vs. Obiter: Ratio - When an applicant is found eligible under the applicable policy, the administrative authority must grant the concession certificate and refund excess tax; procedural timelines for disposal may be directed by the Court. Obiter - Notes that the 2019 policy introduced entitlement-certificate requirements and length restrictions which distinguish it from the 2018 policy. Conclusions: The Court directed reconsideration of the application dated 17.08.2019 under the 2018 policy and, if eligibility is established, issuance of the concession certificate and refund of excess GST. A specific timetable (four weeks) was imposed for final disposal of the application. Cross-references and Related Points 1. The Court's conclusion on Issue 1 is dispositive of Issues 2 and 3: because the application predated the amendment, respondents' procedural return and refusal (Issue 2) were invalid, leading to the remedial direction (Issue 3). 2. The Court noted the substantive distinction between the 2018 and 2019 policies (introduction of entitlement certificate and vehicle-length/date restrictions in 2019) only to emphasize why temporal application matters; those changes were not applied retroactively. 3. The Court treated the Chief Commissioner's order as consonant with the Court's view; respondents' refusal to follow that administrative direction was quashed and replaced by a judicial direction for reconsideration under the correct policy.