Delhi High Court - Orders
Batra Enterprises vs Commissioner Of Customs(Drawback) & ... on 11 July, 2022
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~21
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 12143/2018 & CM APPL. 47149/2018
BATRA ENTERPRISES ......Petitioner
Through: Mr Rajesh Jain, Advocate with Mr
Virag Tiwari and Mr Ramashish,
Advocates
versus
COMMISSIONER OF CUSTOMS(DRAWBACK) & ANR.
......Respondents
Through: Mr Satyakam, Advocate, ASC for R-1
CORAM:
HON'BLE MR JUSTICE RAJIV SHAKDHER
HON'BLE MS JUSTICE TARA VITASTA GANJU
ORDER
% 11.07.2022 [Physical Hearing/Hybrid Hearing (as per request)]
1. Mr Rajesh Jain, who appears on behalf of the petitioner, for the moment, presses the following reliefs, articulated in the prayer clause of the captioned writ petition:
"a) quash and set aside the impugned order dated 23.7.2018 passed by the AC;
b) quash and set aside the impugned orders dated 8.2.2018, 4.4.2018,9.7.2018, 5.9.2018 & 3.10.2018 passed by the Commissioner, State Tax, declaring them to have been issued without jurisdiction and authority of law;
c) direct the respondent no. 1 to grant refund of Rs. 29,16,569/-
of Central Tax, Rs. 16,781/- of Cess and Rs. 13,44,750/- of State Tax under Section 54 of the Central as well as the State Act;
d) direct the respondent no. 1 to grant interest in terms of Section 56 of the Central as well as State Act;
f) summon the case records relating to the refund proceedings including the records of RAC;
g) Issue a Writ of Mandamus or any other Writ, Order or Direction;
W.P.(C) 12143/2018 page 1 of 6 Signature Not Verified Digitally Signed By:KAUSHAL KUMAR SACHDEVA Signing Date:15.07.2022 16:22:50
h) Issue a Writ of Certiorari or any other Writ, Order or Direction;"
2. A perusal of the writ petition would show that the petitioner has, in effect, assailed the order dated 23.07.2018, whereby the refund claimed by the petitioner qua central tax and cess was rejected entirely, while insofar as refund of state tax was concerned, there was a partial rejection. 2.1. This order, being brief, is set forth hereafter:
"Sir/Madam, This has reference to your above mentioned application for refund filed under section 54 of the GST Act*/interest on refund*. Upon examination of your application, the amount of refund sanctioned to you, after adjustment of dues (where applicable) is as follows:
Sr. Description Central State UT Integrated Penalty Cess No. Tax Tax Tax Tax
(i) Amount of 2916569 2916569 - - - 16781 refund/interest claimed
(ii) Refund Nil 1571819 - - - Nil sanctioned on provisional basis (Order No. ...date) (if applicable)
(iii) Refund 2916569 1344750 - - - 16781 amount inadmissible <<reason dropdown>>< Multiple reasons to be allowed>
(iv) Gross amount Nil 1571819 - - - -
to be paid (1-
2-3)
W.P.(C) 12143/2018 page 2 of 6
Signature Not Verified
Digitally Signed By:KAUSHAL
KUMAR SACHDEVA
Signing Date:15.07.2022
16:22:50
(v) Amount - - - - - -
adjusted
against
outstanding
demand (if
any) under the
existing law
or under the
Act. Demand
Order No. ...
date....., Act
Period
<Multiple
rows possible
add row to be
given>
(vi) Net amount to Nil 1571819 - - - -
be paid
Reason for inadmissible (: 1) The dealer have drawn duty draw back on the higher Side (Category A) (2) Dealer has exported some goods which were purchased under VAT regime. I hereby sanction an amount of INR 15,718,19/- to M/s M/s Batra Enterprises having GSTIN 07AAFFB2718P1 Z8, under sub-section(5} of section (54) of the Act/under 56 of the Act and the amount is to be paid to the bank account no. 2019285010313, CANARA BANK, IFSC Code:- CNRB0002019, M1CR: 110015075, DELHI RAJA GARDEN, DELHI-110027..."
3. Mr Jain submits that the said order is unsustainable, for two reasons. 3.1. First, the rejection, although facially ordered by an officer holding the rank of Assistant Commissioner, Department of Trade and Taxes, is founded on the decision of the Refund Approval Committee [in short "RAC"], constituted by the Commissioner vide various orders, commencing with the order dated 08.02.2018.
W.P.(C) 12143/2018 page 3 of 6 Signature Not Verified Digitally Signed By:KAUSHAL KUMAR SACHDEVA Signing Date:15.07.2022 16:22:50 3.2. This order, amongst others, has been assailed by the petitioner, as would be evident upon prayer clause (b), extracted above. 3.3. The other orders, which have been passed in line with the order dated 08.02.2018, are the orders dated 04.04.2018, 09.07.2018, 05.09.2018 and 03.10.2018.
3.4. It is Mr Jain's contention that a bare perusal of Section 54(5) and (6) of the Central Goods and Services Tax Act, 2017 [in short "Central Act"] would show, that a refund application is to be processed only by a "proper officer", and not by the RAC.
3.5. Furthermore, in order to demonstrate, in this particular case, that the impugned order was founded on the decision taken by the RAC, Mr Jain has drawn our attention to the Minutes of Meeting (MOM) dated 13.07.2018. [See pdf page 174 of the case file.]
4. The other ground that Mr Jain presses for assailing the impugned order dated 23.07.2018, concerns the fact that the denial of refund under the Central Act is predicated on the third proviso appended to Section 54(3) of the said Act, which reads as follows:
"Section 54(3)
(i) xxx xxx xxx
(ii) ...Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies..."
4.1. It is Mr Jain's contention that refund of ITC can only be denied if the petitioner had availed the drawback in respect of Central Tax. The fact that W.P.(C) 12143/2018 page 4 of 6 Signature Not Verified Digitally Signed By:KAUSHAL KUMAR SACHDEVA Signing Date:15.07.2022 16:22:50 the petitioner had not availed duty drawback is sought to be demonstrated by referring to the counter-affidavit filed by respondent no.2/Commissioner of Customs (Drawback.) 4.2. In this context, paragraph 2 of the counter-affidavit filed by respondent no.2 is adverted to by Mr Jain. The assertions made by respondent no.2 reads thus:
"2. That regarding the payment of drawback to the Petitioner, it is stated that query was raised by the answering respondent to submit certain documents. The queries are available in the system and could be viewed by the Petitioner any time. Since the Petitioner has not submitted the documents till date, the Drawback amount has not been sanctioned to the petitioner..." [Emphasis is ours.] 4.3. Mr Jain says that a bare perusal of the assertions made in the said paragraph of the counter-affidavit filed on behalf of respondent no.2, shows that the duty drawback, even according to respondent no. 2, was not availed by the petitioner, as it was not sanctioned.
4.4. In fact, Mr Jain says that towards this end, in anticipation, the petitioner had deposited Rs.4,07,435/-, which, since then, has been refunded to the petitioner by respondent no.2.
4.5. In sum, according to Mr Jain, the very basis for denying the refund of ITC under Central Tax did not exist, as the petitioner had not availed duty drawback, contrary to what has been stated in the impugned order dated 23.07.2018.
4.6. Insofar as the partial denial of refund of State Goods and Services Tax [in short "SGST"] is concerned, Mr Jain says that no notice was issued and W.P.(C) 12143/2018 page 5 of 6 Signature Not Verified Digitally Signed By:KAUSHAL KUMAR SACHDEVA Signing Date:15.07.2022 16:22:50 that the notice issued, was confined to the Central Tax. In this context, our attention has been drawn to Annexure P-4, which is the notice for rejection of application for refund and is dated 22.05.2018. 4.7. Likewise, insofar as the rejection of refund of cess is concerned, Mr Jain says that no notice was issued to the petitioner.
5. The non-application of mind is sought to be demonstrated by Mr Jain by adverting to the contents of the said notice. The notice sought to give the petitioner ten days to file a reply, even while its authorized representative was directed to appear before the concerned officer within three days i.e., 25.05.2018.
5.1. Mr Jain says that Rule 92(3) of the Central Goods and Services Rules, 2017, required the respondents to grant 15 days to the petitioner for filing the reply.
6. These are the aspects, which the respondents are required to answer.
7. Since Mr Satyakam is in difficulty today, list the matter on 14.07.2022, at the end of the Board.
8. Mr Satyakam will answer the aforesaid issues raised by Mr Jain on the next date of hearing.
RAJIV SHAKDHER, J TARA VITASTA GANJU, J JULY 11, 2022/rhc Click here to check corrigendum, if any W.P.(C) 12143/2018 page 6 of 6 Signature Not Verified Digitally Signed By:KAUSHAL KUMAR SACHDEVA Signing Date:15.07.2022 16:22:50