Case Law Details

Case Name : Coromandel International Ltd Vs Union of India and others (Jammu & Kashmir HC)
Appeal Number : WP(C) 2338/2021
Date of Judgement/Order : 28/02/2023
Related Assessment Year :

Coromandel International Ltd Vs Union of India and others (Jammu and Kashmir High Court)

It is submitted that petitioner, applied for reimbursement by way of Budgetary support for the period, January 2020 to March 2020 and April 2020 to June 2020 before Central Tax Authorities. The Adjudicating Authority illegally and arbitrarily rejected the reimbursement under Budgetary support on the ground that the petitioner had closing balance of Input Tax Credit lying unutilized at the end of quarter and had reduced the budgetary support arbitrarily to the extent of the closing balance of Input Tax Credit that remained unutilized at the end of the quarter. The rejection of claim of budgetary support, it is submitted, runs contrary to the Scheme as envisaged by the Government of India.

It is submitted that, during pendency of the writ petitions, the Financial Commissioner of Finance Department, UT of Jammu and Kashmir issued clarification vide his No. FD-ST/29/2022-03 dated 26.04.2022 with respect to determination of amount of reimbursement under SRO 519 dated 21.12.2017, SRO 521 dated 21.12.2017 and SRO 63 dated 05.02.2018.

The grievance projected by the petitioner in these petitions is that, with clarification or without clarification, the position is clear that the budgetary support is required to be allowed to the eligible industrial units, like the petitioner by calculating the same on the quantum of cash tax paid through cash ledger account on monthly basis instead of adopting the calculations on quarterly basis as is being done by the Adjudicating Authority. It is submitted that in view of the clarification issued, the doubts, if any, with regard to the applicability of formula to work out the budgetary support have been cleared and, therefore, the issue needs to be reconsidered by the Adjudicating Authority.

Having heard learned counsel for the parties and perused the material on record, we are of the view that, issuance of clarification by the Finance Department, UT of Jammu and Kashmir, has necessitated revisiting of claim of the petitioner by the Adjudicating Authority.

The impugned order passed by respondent No.3 is quashed and the matters remanded to respondent No.3 to reconsider the entire issue having regard to the clarification issued by the Department of Finance, UT of Jammu and Kashmir bearing No. FD-ST/29/2022-03 dated 26.04.2022 and pass appropriate orders on merits.

FULL TEXT OF THE JUDGMENT/ORDER OF JAMMU & KASHMIR HIGH COURT

With the consent of both the parties, these writ petitions are admitted and taken up for final disposal. Both the petitions under Article 226 of the Constitution of India are directed against order dated 02.02.2021 passed by respondent No.3 to the extent of rejection of claim of the petitioner under Budgetary Support Scheme notified vide Notifications No.FNO 10(1)/2017-DBA-II/NER dated 05.10.2017, SRO 519 dated 21.12.2017 and SRO 521 dated 21.12.2017. The petitioner also prays for a Writ of Mandamus directing the respondents to allow the Budgetary support to it by calculating the same on the quantum of cash tax paid through cash ledger account on monthly basis instead of adopting the calculations on quarterly basis.

2. It is submitted that the petitioner, vide its letters dated 05.06.2020 and 16.09.2020 applied for reimbursement by way of Budgetary support for the period, January 2020 to March 2020 and April 2020 to June 2020 before the Central Tax Authorities. The Adjudicating Authority illegally and arbitrarily rejected the reimbursement under Budgetary support on the ground that the petitioner had closing balance of Input Tax Credit lying unutilized at the end of quarter and had reduced the budgetary support arbitrarily to the extent of the closing balance of Input Tax Credit that remained unutilized at the end of the quarter. The rejection of claim of budgetary support, it is submitted, runs contrary to the Scheme as envisaged by the Government of India.

3. The petitioner submits that, feeling aggrieved and dissatisfied by the order of Adjudicating Authority, the petitioner has approached this Court to seek the reliefs prayed for. It is submitted that, during pendency of the writ petitions, the Financial Commissioner of Finance Department, UT of Jammu and Kashmir issued clarification vide his No. FD-ST/29/2022-03 dated 26.04.2022 with respect to determination of amount of reimbursement under SRO 519 dated 21.12.2017, SRO 521 dated 21.12.2017 and SRO 63 dated 05.02.2018. It is submitted that the aforesaid clarification came to be issued by the Financial Commissioner in view of the doubts raised with regard to the application of formula related to determination of amount of reimbursement to the eligible industrial units and also that in view of the wrong formula applied, the claims of various industrial units were being rejected erroneously.

4. The grievance projected by the petitioner in these petitions is that, with clarification or without clarification, the position is clear that the budgetary support is required to be allowed to the eligible industrial units, like the petitioner by calculating the same on the quantum of cash tax paid through cash ledger account on monthly basis instead of adopting the calculations on quarterly basis as is being done by the Adjudicating Authority. It is submitted that in view of the clarification issued, the doubts, if any, with regard to the applicability of formula to work out the budgetary support have been cleared and, therefore, the issue needs to be reconsidered by the Adjudicating Authority.

5. Mr. D.C. Raina learned Advocate General assisted by Mr. Kotwal, Dy.AG and Mr. Jagpaul, CGSC fairly submit that the matters need to be remanded and reconsidered afresh by the Adjudicating Authority in light of the clarification issued by the Department of Finance.

6. Having heard learned counsel for the parties and perused the material on record, we are of the view that, issuance of clarification by the Finance Department, UT of Jammu and Kashmir, has necessitated revisiting of claim of the petitioner by the Adjudicating Authority.

7. In view of the above, these petitions are disposed of by providing as under:

The impugned order passed by respondent No.3 is quashed and the matters remanded to respondent No.3 to reconsider the entire issue having regard to the clarification issued by the Department of Finance, UT of Jammu and Kashmir bearing No. FD-ST/29/2022-03 dated 26.04.2022 and pass appropriate orders on merits.

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