Lupin Limited Anr. Vs Union of India & Anr (Sikkim High Court)
Introduction: In this case Lupin Limited, a prominent pharmaceutical company, challenged a recovery order issued by the Assistant Commissioner of Central Goods & Service Tax and Central Excise, Gangtok Division. The dispute arose from the alleged excess cash refund under the Budgetary Support Scheme due to the petitioner’s purported non-utilization of the entire input tax credit available in Form 2A. This article delves into the details of the case, highlighting the court’s directive for reconsideration and the implications of reduced demand on the original order.
Background of the Case: Lupin Limited, engaged in the manufacturing and sale of drugs, availed the benefits of the Budgetary Support Scheme, resulting in a sanctioned refund. Subsequently, an audit revealed discrepancies, asserting that Lupin had not fully utilized the available input tax credit in Form 2A, leading to an alleged excess cash refund.
Contentions Raised: Lupin’s defense rested on two key contentions: First, it argued that Form 2A serves as a facilitator, and the entire credit reflected in it cannot be utilized as such. Second, Lupin asserted that the documents it produced in its defense were not duly considered during the proceedings.
Court’s Directive and Subsequent Developments: The Hon’ble High Court of Sikkim, in response to Lupin’s contentions, directed the Revenue to examine the additional information furnished by the petitioner. Following this directive, a report was submitted, resulting in a reduction of the demand from the original amount. Recognizing the reduced demand, the court emphasized that the original order could not sustain.
Reconsideration and Agreement by Deputy Solicitor General: Acknowledging the revised recovery amount and the need for reconsideration, the Deputy Solicitor General of India concurred with the court’s stance. Consequently, the court disposed of the petition, directing the Revenue to proceed in accordance with the law.
Conclusion: The Lupin Limited vs Union of India case before the Sikkim High Court underscores the significance of thorough examination and reconsideration in matters of taxation disputes. The court’s directive to revisit the recovery demand, coupled with the Deputy Solicitor General’s agreement, reflects a commitment to justice and fair proceedings. This legal development serves as a reminder of the dynamic nature of tax litigation and the judiciary’s role in ensuring a just and equitable resolution.
The matter was argued by our Partner Bharat Raichandani
FULL TEXT OF THE JUDGMENT/ORDER OF SIKKIM HIGH COURT
1. The present writ petition challenges the recovery order dated 06.06.2022 passed by the Assistant Commissioner of Central Goods & Service Tax and Central Excise, Gangtok Division.
2. On 19.05.2023 after hearing the learned counsel for the parties this Court directed the respondents to examine the additional information furnished by the petitioner vide email dated 20.06.2022 to the respondents which was forwarded only after the recovery order dated 06.06.2022 had been issued.
3. In compliance thereto the Assistant Commissioner has submitted a report dated 06.10.2023 according to which on consideration of the documentation the recovery order needs a revision as the amount now stands at Rs.37,93,159/- only. The recovery order dated 06.06.2022 was for an amount of Rs.41,64,578/-. In view of the same, the learned Deputy Solicitor General of India agrees that the recovery order needs re-examination.
4. Thus, this Court is of the view that the end of justice would be well met, if the respondents are permitted to revisit the recovery demand and take appropriate action as per law. It is accordingly so ordered. Nothing therefore, survives in the writ petition which is disposed of in the above terms.
