Allahabad HC Directs Appeal in ITC Refund Dispute against 4 Year old order

Bushrah Export House , Lko. Thru. Sole Proprietor Mr. Syed Asif Ali Vs Union of India (Allahabad High Court)

Allahabad HC Directs Appeal for ITC Refund Dispute against the orders impugned even after nearly four year for the matter of section 54(7) of CGST Act

In the case of Bushrah Export House vs. Union of India, the petitioner sought relief from the Allahabad High Court regarding the denial of an Input Tax Credit (ITC) refund of Rs. 1,86,40,533 for the period September 2019 to January 2020. The petitioner challenged the order issued on May 1, 2024, and a show-cause notice dated March 7, 2024, which was issued nearly four years after the initial application without a proper hearing. The petitioner’s counsel argued that under Section 54(7) of the Central GST Act, 2017, the refund order should have been issued within 60 days. The respondents raised a preliminary objection, citing the availability of a statutory remedy under Section 107, which allows the petitioner to file an appeal. The court was informed of a related pending Special Appeal involving a different refund amount and period. Acknowledging the difference in causes of action, the court dismissed the writ petition and directed the petitioner to seek remedy through the appellate authority, emphasizing that the appeal should be considered on its merits due to the time already spent pursuing the writ petition.

FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT

Heard Sri Yashovardhan Swarup, learned counsel for the petitioner, Sri Saurabh Mishra who has filed his memo of appearance on behalf of the respondent no. 1 and Sri Amit Kumar Singh who appears on behalf of respondent nos. 2 to 5.

This petition has been filed by the petitioner with the following main prayers:-

“i. a Writ of Certiorari of a writ, order or direction in the nature of certiorari quashing the order dated 01.05.2024 passed by the Opposite Party No.4 contained in Annexure No. 2 to this writ petition;

ii. a Writ of Certiorari of a writ, order or direction in the nature of certiorari quashing the) show cause notice dated 07.03.2024 (GST RFD-8) with respect to ARN AA0905200368563 contained in Annexure No. 3 to this writ petition;

iii. Writ of Mandamus commanding the Opposite Parties to refund the amount of Rs.1,86,40,533.00 (Rupees One crore eighty six lakh forty thousand five hundred thirty three) as claimed vide (Application Reference Number) ARN AA0905200368563 dated 26.05.2020 for the period from September 2019 to January 2020;

iv. a Writ of Mandamus commanding the Opposite Parties to disburse the amount of Rs. 1,86,40,533.00 (Rupees One crore eighty six lakh forty thousand five hundred thirty three) forth with along with applicable interest;”

It is the case of the petitioner that the petitioner had claimed an amount of Rs. 1,86,40,533/- as refund/Input Tax Credit for purchase of goods from its suppliers which it utilized further in manufacturing and export of garments for the period September 2019 to January 2020. Under section 54(7) of the Central GST Act, 2017, the proper officer has to issue an order under sub­section (5), within sixty days from the date of receipt of application complete in all respects. Hence, the order of refund of Input Tax Credit should have been issued within sixty days. The order was required to be passed on or before 25.7.2020 after giving an opportunity of hearing to the applicant. In absolute violation of statutory provisions, a show cause notice has been issued on 7.3.2024 with respect to the application of the petitioner that is after a lapse of nearly four years and without affording any opportunity of hearing, an order has been passed on 29.5.2020 by the Assessing Officer which has been challenged in this petition.

The counsel appearing for the respondent nos. 2 to 5 has raised the preliminary objection regarding maintainability of the petition and he says under section 107, the petitioner has statutory remedy of filing an appeal.

Learned counsel for the petitioner has submitted that the petitioner’s case with regard to the same claim for Input Tax Credit. refund is pending before this Court in Special Appeal Defective No. 20 of 2023. He has referred to order passed by the Additional Commissioner Appeals Customs, GST and Central Excise dated 16.8.2021 wherein, the claim for refund was allowed by the appellate authority against which the department filed Writ C No. 29052 of 2021, Principal Commissioner, CGST versus M/S Bushrah Export House. The Court set aside the order dated 13.8.2021 by detailed order on 5.9.2022. The department has filed a Special Appeal against the writ Court’s order dated 5.9.2022 and the appeal has been admitted and in the meantime, the implementation of the judgment rendered by the writ Court has been stayed. A copy of the order passed by Division Bench of this Court on 17.1.2023 has been produced before this Court.

Learned counsel appearing on behalf of the respondent has pointed out that the earlier writ petition had arisen out of an appeal filed by the petitioner before the appellate authority and the period for which refund was claimed by the petitioner was also different and the amount of refund claimed was Rs. 1,84,17,252/- as is evident from the appellate authority’s order. In the instant case, the petitioner has claimed a refund of Rs. 1,86,40,537/- as ITC for purchases made by for different period.

We have been convinced that even though, a Special Appeal is pending before this Court in a case relating to the writ petition, but the cause of action in the said Special Appeal is different.

The writ petition is disposed of with the direction to the petitioner to approach the appellate authority against the orders impugned. It is directed that the appellate authority shall consider the appeal of the petitioner on its merits as the petitioner has spent valuable time in pursuing the writ petition filed mistakenly before this Court.