Case Law Details

Case Name : Infor (India) Private Limited Vs Union of India (Karnataka High Court)
Appeal Number : Writ Petition No.5948/2021 (T-Res)
Date of Judgement/Order : 08/12/2022
Related Assessment Year :

Infor (India) Private Limited Vs Union of India (Karnataka High Court)

Petitioner submits that during the pendency of the present writ petition, respondents have issued a Circular bearing No.159/15/2021 -GST dated 20.09.2021 clarifying and explaining the scope of Intermediary services.

It is the contention of the learned counsel for the petitioner that the said explanation contained in the Circular has not been considered either by the Appellate Authority or in the orders-in- original and consequently, the impugned orders deserve to be set aside.

Per contra, learned counsel for the respondents submits that in view of availability of equitable and alternative remedy by way of an appeal to the Appellate Authority as well as the Tribunal, the present petition is not maintainable. It is also submitted that in the event, this Court were to quash the orders­in-original as well as the order passed by the Appellate Authority, the orders passed by the respondents sanctioning refund also deserve to be set aside and the matter has to be remitted back to the respondents for reconsideration afresh in accordance with

In view of the aforesaid facts and circumstances of the case and in the light of the aforesaid submission and the Circular dated 20.09.2021 which has come into effect during the pendency of the present writ petition, I am of the considered opinion that the impugned orders as well as the refund orders at Annexure-K dated 11.02.2019, Annexure-L dated 22.05.2019, Annexure-M dated 25.05.2019 and Annexure-N dated 12.2019 deserve to be set aside and the matter deserves to be remitted back to the concerned respondents for reconsideration afresh in accordance with law.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

1. In this writ petition, petitioner seeks the following reliefs:

“(a) Issue a writ of certiorari or any other appropriate writ, order or direction quashing the impugned order-in-appeal dated: 27.04.2020 (Annexure-A) and two impugned order(s)-in-original, both dated: 24.07.2020 (Annexure B and Annexure C).

(b) Issue a writ of mandamus or any other appropriate writ, order or direction and direct the Respondents to forthwith sanction an amount of Rs.2,58,50,733/- along with applicable interest as rejected by the two impugned order(s)-in- Original, both dated: 24.07.2020 (Annexure B and Annexure C).

(c) Issue a writ, order or direction to the Respondents to consider future claims of refund of the Petitioner without reference to and/or being influenced by the impugned order-in-appeal dated: 27.04.2020.

(d) For costs of this petition.

(e) For such further and other reliefs as and the nature and circumstances of the case may require.”

2. Heard the learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

3. In addition to reiterating various contentions urged in the petition and referring to the documents produced, learned counsel for the petitioner submits that pursuant to the refund claims submitted by the petitioner, respondents sanctioned refund vide orders at Annexure-K dated 11.02.2019, Annexure-L dated 22.05.2019, Annexure-M dated 25.05.2019 and Annexure­ N dated 14.12.2019. Subsequently, aggrieved by the same, the respondents preferred an appeal to the First Appellate Authority, which was allowed vide order dated 27.04.2020 at Annexure-A.

4. Pursuant to the aforesaid order passed by the Appellate Authority, the orders-in-original dated 24.07.2020 were passed by the respondents vide Annexures-B and C rejecting the claim of the petitioner to an extent of Rs.2.58 crores.

5. Aggrieved by the aforesaid impugned orders, petitioner is before this Court by way of present petition.

6. Learned counsel for the petitioner submits that during the pendency of the present writ petition, respondents have issued a Circular bearing No.159/15/2021 -GST dated 20.09.2021 clarifying and explaining the scope of “Intermediary services”. Clause 3.5 of the said Circular reads as under:

“3.5 Sub-contracting for a service is not an intermediary service: An important exclusion from intermediary is sub-contracting. The supplier of main service may decide to outsource the supply of the main service, either fully or partly to one or more sub-contractors. Such sub-contractor provides the main supply, either fully or a part thereof, and does not merely arrange or facilitate the main supply between the principal supplier and his customers, and therefore, clearly is not an intermediary. For instance, ‘A’ and ‘B’ have entered into a contract as per which ‘A’ needs to provide a service of, say, Annual Maintenance of tools and machinery to ‘B’, ‘A’ subcontracts a part or whole of it to ‘C’. Accordingly, ‘C’ provides the service of annual maintenance to ‘A’ as part of such sub­contract, by providing annual maintenance of tools and machinery to the customer of ‘A’, i.e. to ‘B’ on behalf of ‘A’. Though ‘C’ is dealing with the customer of ‘A’, but ‘C’ is providing main supply of Annual Maintenance Service to ‘A’ on his own account, i.e. on principal to principal basis. In this case, ‘A’ is providing supply of Annual Maintenance Service to ‘B’, whereas ‘C’ is supplying the same service to ‘A’. Thus, supply of service by ‘C’ in this case will not be considered as an intermediary.”

7. It is the contention of the learned counsel for the petitioner that the said explanation contained in the Circular has not been considered either by the Appellate Authority or in the orders-in- original and consequently, the impugned orders deserve to be set aside.

8. Per contra, learned counsel for the respondents submits that in view of availability of equitable and alternative remedy by way of an appeal to the Appellate Authority as well as the Tribunal, the present petition is not maintainable. It is also submitted that in the event, this Court were to quash the orders­in-original as well as the order passed by the Appellate Authority, the orders passed by the respondents sanctioning refund also deserve to be set aside and the matter has to be remitted back to the respondents for reconsideration afresh in accordance with

9. In view of the aforesaid facts and circumstances of the case and in the light of the aforesaid submission and the Circular dated 20.09.2021 which has come into effect during the pendency of the present writ petition, I am of the considered opinion that the impugned orders as well as the refund orders at Annexure-K dated 11.02.2019, Annexure-L dated 22.05.2019, Annexure-M dated 25.05.2019 and Annexure-N dated 12.2019 deserve to be set aside and the matter deserves to be remitted back to the concerned respondents for reconsideration afresh in accordance with law.

10. In the result, I pass the following:

ORDER

(i) Petition is hereby allowed.

(ii) The impugned order-in-Appeal at Annexure-A dated 27.04.2020 and the Orders-in-Original at Annexures-B and C dated 24.07.2020 are hereby set aside.

(iii) So also, the refund orders at Annexure-K dated 11.02.2019, Annexure-L dated 22.05.2019, Annexure-M dated 25.05.2019 and Annexure-N dated 12.2019 are also set aside.

(iv) Liberty is reserved in favour of the petitioner to file additional pleadings, documents etc., before the respondents who shall consider the same and proceed further in accordance with law.

(v) The matter is remitted back to the concerned respondents for reconsideration of the claim of the petitioner afresh in accordance with law bearing in mind the Circular dated 20.09.2021 and after providing sufficient opportunity to the petitioner.

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