Skylark Infra Engineering Pvt. Ltd. Vs Union of India (Rajasthan High Court)
Rajasthan High Court ruled on a petition filed by Skylark Infra Engineering Pvt. Ltd., challenging the rejection of its appeal for the 2017-18 assessment year by the Appellate Authority, State Tax, Jaipur. The petitioner disputed the classification of its supplies as intra-state (subject to CGST and SGST) rather than inter-state (subject to IGST). Skylark also questioned the vires of Section 19(1) of the IGST Act and Section 77(1) of the CGST and RGST Acts, 2017, alleging constitutional inconsistency.
The petitioner contended that taxes had already been deposited under IGST, yet a portion of these funds had not been refunded, despite a prior court directive. In response, the court had earlier instructed Skylark to deposit the balance amount of CGST and RGST within three months, contingent on receiving the IGST refund. As of the hearing, only partial refunds were issued, causing delays in fulfilling the pre-deposit requirement for filing appeals.
Considering the circumstances, the High Court allowed Skylark Infra to pursue an appeal before the GST Tribunal once it is constituted. The court directed the petitioner to deposit the refunded IGST amount and clarified that no recovery proceedings for the balance amount would occur if the pre-deposit condition for filing an appeal is met. The court emphasized that issues regarding the vires of the disputed provisions remain open for future adjudication.
The judgment highlights procedural challenges arising from the delay in forming the GST Tribunal, a recurring issue in tax litigation. It follows judicial precedents such as ITC Ltd. v. Union of India (Calcutta High Court, 2020), where courts have provided interim relief to taxpayers facing similar tribunal delays.
This ruling underscores the court’s focus on procedural compliance while ensuring taxpayers are not unduly penalized due to administrative lapses. Skylark Infra has been given a three-month window to file its appeal after the tribunal’s constitution, reaffirming the importance of timely adjudication in tax disputes.
