SNS Minerals Private Limited Vs Assistant Commissioner and Others (Madhya Pradesh High Court)
The Madhya Pradesh High Court, in SNS Minerals Private Limited v. Assistant Commissioner and Others, declined to entertain a writ petition challenging an Order-in-Appeal dated 17 February 2023 and held that, following the constitution of the GST Appellate Tribunal (GSTAT), taxpayers must ordinarily pursue the statutory appellate remedy before invoking writ jurisdiction under Article 226 of the Constitution.
The petitioner, a company engaged in mining and supply of limestone and registered under the GST laws, had paid GST at 18% under the reverse charge mechanism on royalty during the period from April 2018 to December 2018, while its outward supplies were taxable at 5%, resulting in accumulation of excess input tax. After reversing the input tax credit attributable to the excess payment, the petitioner filed refund claims under Section 54(3) of the CGST Act aggregating to ₹84,26,536. A show cause notice proposing rejection of the refund was issued on the ground that input tax credit had been availed. Although the petitioner clarified that such credit had already been reversed, the refund claims were rejected by the adjudicating authority on 5 February 2020.
The petitioner challenged the rejection before the appellate authority, which, by Order-in-Appeal dated 20 May 2021, allowed the appeal and held the petitioner entitled to refund. Pursuant to this order, the petitioner filed a refund application on 3 July 2021, and the refund amount of ₹84,26,536 was sanctioned and disbursed on 19 August 2021, although the claim for interest was rejected. Subsequently, review proceedings were initiated, and directions were issued for filing an appeal against the refund sanction order. Separately, a show cause notice under Section 73 of the CGST Act was issued seeking recovery of the refund. Thereafter, the Department’s appeal against the refund sanction order was allowed by the appellate authority through the impugned Order-in-Appeal dated 17 February 2023, setting aside the refund already granted. Aggrieved by this development, the petitioner approached the High Court under Article 226.
