Case Law Details
Indian Herbal Store Pvt. Ltd. Vs Union Of India & Ors. (Delhi High Court)
The Hon’ble Delhi High Court in the case of M/s. Indian Herbal Store Pvt. Ltd. vs. Union of India [W.P.(C) 9908/2021 and W.P.(C) 9912/2021 dated September 15, 2023] allowed the writ petition and held that the Rule 89(4)(C) of the Central Goods and Services Rules, 2017 (“the CGST Rules”) would not have any retrospective application. The Hon’ble High Court while relying upon the judgment of the Hon’ble Karnataka High Court in M/s. Tonbo Imaging India Pvt. Ltd. vs. Union of India and Others [W.P.(C) No. 13185/2020 dated February 16, 2023], noted that Hon’ble Karnataka High Court has already struck down the substitution made in Rule 89(4)(C), being arbitrary and ultra vires in nature and contrary to provisions of Section 54 of the Central Goods and Services Tax Act (“the CGST Act“). Therefore, the Hon’ble High Court set aside the Refund Rejection Order and Order-In-Appeal and directed the Revenue Department to process the claim for Refund of unutilized Input Tax Credit (“ITC”).
Facts:
M/s. Indian Herbal Store Pvt. Ltd. (“the Petitioner”) is an exporter of herbal goods through an e-commerce platform supplying goods through courier service.
The Petitioner filed three refund applications (“the Application”) for claiming refund of unutilized ITC for the quarter of October, 2018 to December, 2018 of the Financial Year (“the FY”) 2018-2019 (“the Impugned Period 1”). Thereafter, a Show Cause Notice (“the SCN”) was issued for the Impugned Period 1. However, the aforesaid Application was rejected by the Revenue Department (“the Respondent”) vide Refund Rejection Order (“the Order”) dated September 15, 2020, for the Impugned Period 1 on the ground of non-fulfilment of conditions as laid out in Rule 89(4)(C) and Rule 96B of the CGST Rules.
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