Vivo Mobile India Private Ltd. Vs Union of India (Allahabad High Court)
1. Heard Sri Tarun Gulati, learned Senior Counsel assisted by Sri Nishant Mishra, Sri Kishore Kunal, and Ms. Vedika Nath, learned counsel for the petitioner, Sri Gaurav Mahajan, learned counsel for Central Board of Indirect Taxes, Sri Manish Goyal, learned Additional Advocate General assisted by Sri Nimai Dass, learned Additional Chief Standing Counsel and Sri Ankur Agarwal, learned Standing Counsel for the State of Uttar Pradesh.
2. Present petition has been filed for various reliefs described in the prayer clause. At the same time, after exchange of affidavits and, upon the matter being heard, prayer nos. B, C and D alone have been pressed. Other prayers have not been pressed, at this stage. Thus, the challenge raised to the vires of Rule 36(4) of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the ‘CGST Rules, 2017‘), has been specifically given up, at this stage.
3. Primary relief being sought by the petitioner is against the order dated 7.4.2021 passed by the Deputy Commissioner, Sector-2, Commercial/State Tax, Gautam Buddh Nagar. By that order, passed under Section 74 (9) of the CGST Act, 2017 (hereinafter referred to as ‘the Act’), the said authority has opined that the petitioner had availed/utilised excess Input Tax Credit (ITC in short), Rs. 110,06,90,100.31, for the months of February 2020 to August 2020. Construing the same to be a violation of Rule 36(4) of the CGST Rules, 2017, it has been directed to be reversed and added to the output tax liability of the petitioner, with consequent interest obligation. Also, an equal amount of penalty referable to Section 74 of the Central Goods and Service Tax Rules, 2017 has been imposed. Thus, total demand of Rs. 235.52 crores had been created – inclusive of interest @ Rs. 15,40,00,000/-. Against that demand, the petitioner had self-deposited Rs. 11,00,69,010/- (provisionally, pending this writ petition) being 10% of the disputed demand of tax. However, it has disputed the entire liability.
4. Upon the present petition being entertained, initially, affidavits were called. However, the stay application remained pending. Meanwhile, the respondents recovered the entire amount of tax, Rs. 110,06,90,100.31 and equal amount of penalty, excluding interest. Thus, notwithstanding the pre-deposit Rs. 11,00,69,010/- made (provisionally, pending this writ petition), further Rs. 220,13,80,200.60 were recovered. Later, by order dated 21.9.2022, interim protection was granted to the following effect:
“However, it is provided that till the next date of listing, no further coercive measure shall be taken against the petitioner pursuant to the order dated 07.04.2021, which is subject matter of challenge herein.”
The balance amount of interest was thus stayed.
5. An application Civil Misc. Restitution Application No. 10 of 2022 has been filed. Thereby, the petitioner has sought a refund of the entire amount of deposit made, being Rs. 220,13,80,200.60 and Rs. 11,00,69,010/- (deposited earlier on 14.06.2022, against the disputed demand). Interest claim has also been made on the above refundable amount.
6. Separate Counter Affidavit and Rejoinder Affidavit have been filed to the Restitution Application. Primarily, the defence being set up by the revenue authorities is – they had recovered the disputed amount of tax, penalty, and interest as there was no stay order operating in favour of the petitioner. At the same time, it remains admitted that an amount, Rs. 11,00,69,010/- had been recovered over and above the disputed demand.
7. The petitioner is a duly incorporated company engaged in the business of manufacture, assembly and wholesale trade in cellular phone devices, their spare parts, and accessories. It has a manufacturing facility at Greater Noida, Gautam Buddh Nagar, inside the State of U.P.
8. For the months of February 2020 to August 2020, the petitioner purchased various components of mobile phones etc. from different suppliers within the country. Those purchases were disclosed against the regular Tax Invoice, received by the petitioner. To that extent, there is no dispute between the parties. At the same time, against such purchases made, in the claim of ITC, there exists a dispute between the parties.
9. The petitioner claims there is no excess claim made by it, for the months (period) February 2020 to August 2020. The revenue claims otherwise. Arising from such difference of perception, a common tabular chart (for the period under dispute), reflecting the Tax Invoice figures as per GSTR-3B (filed by the petitioner) and GSTR-2A (generated upon details furnished by the suppliers), as also the computation of ITC as per Rule 36(4) of CGST Rules, 2017, and the now disputed mismatch thereof, has been prepared by the revenue authorities. It is a part of the impugned order itself. It reads as below:
