B.C. Power Controls Limited Vs Union Of India (Rajasthan High Court)
In the case of M/s B.C. Power Controls Ltd. v. Union of India [D.B. Civil Writ Petition No. 13049 of 2020 dated April 18, 2023], the Hon’ble Rajasthan High Court rendered a judgment stating that the refund application for Integrated Goods and Services Tax (IGST) cannot be kept pending indefinitely on the grounds of pending proceedings. This article provides an analysis of the court’s decision and its implications.
Facts
M/s B.C. Power Controls Ltd. (“the Petitioner”) manufactures electrical wires and allied products engaged in the business of export. While exporting goods various export invoices, shipping bills, and bills of lading were generated by the shipping line. The shipping bills are treated as application for refund of IGST as per Section 54 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) read with Section 16 of the Integrated Goods and Services Tax Act, 2017 and Rule 96 of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”).
A Show Cause Notice was issued to the Petitioner by DGGI, Gurugram dated July 17, 2020 (“the SCN”) alleging the production of fake invoices and the application of refund was kept pending as the proceedings initiated vide the SCN were pending. Aggrieved, the Petitioner filed the present writ petition.
The Petitioner submitted that an application for refund cannot be kept pending indefinitely as the provision of law mandate decision of refund applications within a stipulated period.
Issue
Whether refund application can be kept pending indefinitely on the ground of pendency of proceedings?
Held
The Hon’ble Rajasthan High Court in D.B. Civil Writ Petition No. 13049 of 2020 held as under:
