Cipla Limited Vs Union of India (Sikkim High Court)
Summary: The Sikkim High Court allowed the writ petition filed by Cipla Limited challenging deduction of ₹5,27,22,856 from its entitlement under the Scheme of Budgetary Support under the Goods and Services Tax (GST) regime. The petitioner had initially declared Input Tax Credit of ₹15,28,80,613, whereas a Chartered Accountant certificate subsequently furnished at the respondents’ direction showed that the ITC actually availed for the eligible unit was ₹10,01,57,759. The authorities nevertheless proceeded on the higher amount without initially giving the petitioner an opportunity to explain the discrepancy. Even after the High Court directed a personal hearing, the authority declined to consider the objection on the ground that the scheme contained no provision permitting post facto revision or substitution of figures where the benefit would be altered. The High Court held that the matter was not one of rectification in the ordinary sense. The fundamental defect was that the proceedings had been concluded despite an apparent discrepancy between the declaration and the CA certificate without giving Cipla an opportunity to explain it.
The Court observed that although an applicant would ordinarily be bound by its declaration, this could not operate as an inflexible rule where an error or mistake was alleged. A mere human error could not be capitalised upon to the claimant’s prejudice without a reasonable opportunity of explanation. The impugned order was therefore set aside to the extent challenged, Cipla was permitted to produce supporting documents, and Respondent Nos. 5 and 6 were directed to complete the exercise within eight weeks.
