Case Law Details
Palo Alto Networks (India) Private Limited Vs Additional Commissioner (Bombay High Court)
The petitioner applied for refund on the ground that it is an exporter of services. The refund was sanctioned. However, the appellate authority held that the petitioner is an “intermediary” and not eligible for benefit of export of services. The petitioner approached the Hon’ble High Court against order passed by the appellate authority as GST Tribunal has not been constituted till date. The revenue contended that writ petition should not be admitted in wake of alternate remedy. All similar matters were tagged by the Hon’ble High court on this issue.
The reliance was placed on judgment of the Hon’ble High Court of Telangana holding that the assesses cannot be expected to wait till eternity till GST Tribunal is formed and is functional.
The Hon’ble High Court of Bombay directed the CBIC to file an affidavit. The affidavit was filed stating that there is no appeal filed against the Hon’ble High Court of Telangana judgment and it has been accepted. Thus, there is no alternate remedy and the Hon’ble High court can decide the case of merits. Accordingly, all matters relating to refund would be decided on merits, on a case to case basis, by the Hon’ble High court.
The matter was argued by Ld. Counsel Bharat Raichandani
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
In this group of matters on 1 December 2022 a detailed order was passed as under:-
“Heard the learned Counsel for the parties.
2. The Petitioner has challenged the order dated 23 December 2021 passed by the Commissioner, CGST and Central Excise (Appeals), Mumbai, whereby the Appeal filed by the Petitioner challenging the Order-in-Original dated 4 December 2019 by the Assistant Commissioner, CGST rejecting the claim of the Petitioner for refund was dismissed.
3. The Petition was placed on board for hearing today so that the parties could circulate their summary of propositions. Detailed reply on merits is filed by the Respondents. However, the learned Counsel for the Respondents has tendered the written submissions only on the preliminary objection and not on merits contending that the Writ Petition under Article 226 of the Constitution of India should not be entertained to challenge the order passed by the Commissioner (Appeals) in view of the fact that the remedy of the Tribunal is available under Section 109 of the Central Goods & Service Tax Act, 2017. We note that the reply filed by the Principal Commissioner of CGST and Central Excise, Mumbai has dealt with the matter on merits in extensio and as regards preliminary objection it is stated only in one line that the Petitioner has remedy to file statutory appeal. This preliminary objection is expanded in the written submissions filed by the Advocate to take a stand that the Petition should not be heard on merits. These written notes are not signed by the Principal Commissioner.
4. The impugned order states that as against the impugned order the Petitioner has remedy of approaching the Tribunal under Section 112 of the Act of 2017. It is an admitted position that the Tribunal is not constituted as of today.
5. The Advocate for the Respondents relied on the decision of the Hon’ble Supreme Court in the case of Assistant Commissioner of State Tax and Ors. V/s. M/s. Commercial Steel Limited 1 which is pressed in service during the argument with seriousness contending that the Hon’ble Supreme Court has held that even though the Tribunal is not constituted, the Writ Petition should not be entertained. The learned Counsel for the Petitioner has pointed out that decision of the Hon’ble Supreme Court was in the facts where the Petitioner had directly approached the High Court under Article 226 of the Constitution of India even without exhausting the remedy of appeals to the Appellate Authority under Section 107 of the Act of 2017 and the order was not rendered in the context of absence of the Tribunal. The learned Counsel for the Petitioner also points out that in this case the Petitioner has availed of the remedy under Section 107 of the Act of 2017 to the Appellate Authority which is available.
6. The learned Counsel for the Petitioner states that this issue has been squarely dealt with by the Division Bench of Telangana High Court in the case of M/s. Appario Retail Private Limited v/s. The Union of India, through its Revene Secretary, Department of Revenue, Ministry of Finance, New Delhi and Ors. 2, wherein in the identical circumstances where the petitioner was seeking a refund and had challenged the order passed in the appeal, without there being any Tribunal, the Division Bench of Telangana High Court observed in paragraph 51 as under :-
“51. Now, turning to the issue of maintainability of the writ petition, though an effective remedy of appeal to the Appellate Tribunal is provided under Section 109 of the CGST Act, it is an admitted fact that the said Tribunal has not yet been constituted, though more than 3 years have elapsed after the CGST Act has been introduced. Thus, the Petitioner cannot be compelled to wait for eternity to agitate its claim seeking refund of the amount to which it is entitled to under the statute and also blocking its funds affecting its cash flows, merely because of existence of (non functional) alternate forum/ remedy on paper, by not invoking the jurisdiction under Article 226 of the Constitution of India. Further, mere existence of alternative remedy is no bar for invoking the jurisdiction under Article 226 of the Constitution of India, when right to carry on business is being impeded, resulting in violation of fundamental right as guaranteed under Article 19(1)(g) of the Constitution of India.”
(emphasis supplied)
We are not informed whether the order passed by the Telangana High Court has been challenged by the Union of India higher nor we are shown any view taken by any Court that even though the Tribunal is not made functional, no Writ Petition should be entertained.
7. The learned Counsel for the Respondents, who is representing the Union of India, is unable to inform us what is the remedy for the Petitioner. The Advocate for the Respondents has sought to contend that though there is no Tribunal, nor it can be committed when it will be set up in near future, the position that the Petitioner is remedyless, is appropriate. Therefore, it is necessary for us to know whether the Union of India has given such instructions to the Advocate.
8. The Central Board of Indirect Taxes and Customs will file an affidavit in this Petition as to whether the stand taken by the Advocate for the Respondents and pressed seriously in the argument that the position that the Petitioner is remedyless till the tribunal is made functional, is appropriate, is on the instructions of the Respondent – Union of India and as to whether the judgment and order passed by the Telangana High Court in the case of M/s. Appario Retail Pvt. Ltd. is challenged.
9. Stand over 23 January 2023. The affidavit to be filed before the next date. To be heard along with Writ Petition No. 10883 of 2019 where the notice is issued to the Central Board of Indirect Taxes and Customs on similar issue.”
2 The learned ASG states that an Affidavit is filed by the Central Board of Indirect Taxes and Customs, wherein Board has replied to the query raised by the Court in the order dated 1 December 2022 as under:-
“2 I have received an order dated 01.12.2022 passed by the Hon’ble High Court of Bombay in the Writ Petition No. 2453 of 2022 for filing an affidavit stating as to “whether the stand taken by the Advocate for the Respondents and pressed seriously in the argument that the position that the Petitioner is remediless till the tribunal is made functional, is appropriate, is on the instructions of the Respondent Union of India and as to whether the judgment and order passed by the Telangana High Court in the case of M/s. Appario Retail Pvt. Ltd. is challenged”. In this regard, I say and submit as under:
i) The Senior Standing Counsel in this case has not been specifically directed by the Respondent Department to argue on the matter of alternative remedy but briefed on merits. However, instead of arguing on merits, she has only argued on issue of alternative remedy. Accordingly, the Respondent Department shall be represented by Ld. Additional Solicitor General, Bombay High Court and a different Sr. Standing Counsel, before this Hon’ble Court in the said matter.
ii) An affidavit in respect of formation of GST Tribunal has already been filed before this Hon’ble Court in the case of Writ Petition No. 10883 of 2019 filed by M/s. Rochem India P. Ltd.
iii) With regard to judgement and order passed by the Hon’ble Telangana High Court in the case of M/s. Appario Retail P. Ltd., the same has been accepted by the Department and no appeal has been preferred in the said case.
3. I humbly say and submit that the Hon’ble Court may please decide the issue on merits and the Respondent Department would like to withdraw the plea of alternative remedy from the affidavit in reply filed in the present petition.
4. I humbly say and submit that the Respondent Department has no intention that the petitioner should suffer any hardship due to non-availability of GST Appellate Tribunal.”
3 In light thereof, Petitions will have to be heard individually and not as a group, as they were grouped together only on the issue which we have highlighted in the order dated 1 December 2022.
4 As regards Writ Petition No. 2453 of 2022, which we are informed that pleadings are completed and submissions have been filed. Add the Petition on 27 February 2023 at the bottom of the admission board.
5 List Writ Petitions No. 1495/2021, 1690/22, 4852/22 and 3932/21 on 13 March 2023. Liberty to the parties to circulate the praecipe for fixing an earlier date.
6 Ad-interim orders, if any, to continue till the next date.
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