Case Law Details
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.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. These petitions are being decided by this order as the issue and facts involved are For convenience, the facts are being taken from DBCWP No.60/2023.
2. This petition is filed seeking quashing of order dated 09.2022 passed by the Appellate Authority, State Tax, Jaipur rejecting the appeal of the petitioner for assessment year 2017- 18.
3. The relevant facts are that the petitioner claimed supplies made to be inter-state supplies and exigible to Integrated Goods and Services Tax (hereinafter referred to as ‘IGST’). The respondent 3 treated supplies to be intra-state and levied CGST and SGST.
4. The grievance raised in this petition is that the petitioner had already deposited tax under the IGST The challenge in the present petition is also to the Vires of Section 19(1) of IGST Act and Section 77(1) of CGST and RGST Act of 2017.
5. On 04.2023, following order was passed:-
“These matters come up for consideration insofar as compliance of interim order dated 05.01.2023 is concerned.
Learned counsel for the petitioner would submit that this Court had directed the petitioner to deposit balance 65% of CGST and RGST within a period of three months subject to the condition of refund of the IGST within a period of two months from the date of receipt of the application. He would submit that though application for refund has already been made, out of Rs.4.02 crores deposited towards IGST, only Rs.1,17,59,177/- have been refunded which includes both cash as well as credit component. Therefore, in these circumstances, the petitioner may not be required at this stage to deposit 65% of CGST and RGST within the time stipulated by the Court.
Learned counsel for Union of India submits that as far as Union of India is concerned, the amount deposited with it has been refunded and rest of the amount is required to be refunded by the GST Department at Delhi.
Taking into consideration the submission of learned counsel for the parties, we direct the petitioner to deposit refund amount of Rs. 1,17,59,177/- with the State under RGST within a period of one month.
Reply of the respondents may be filed within four weeks and the case be listed after four weeks.
Application No. 01/2023 is, accordingly, disposed off.”
6. Learned counsel for the petitioner on instructions submits that the refund received from Union of India with regard to IGST has been deposited with the Goods & Service Tax The contention is that with the deposit of the amount, the prerequisite of pre-deposit for filing an appeal before Tribunal stands complied. Further that apart from this other amount has already been deposited.
7. Considering determination of the factual aspects is required to be done at first instance before the vires of the provisions can be gone into, the petition is disposed of relegating the petitioner to the remedy of appeal before the GST Tribunal.
8. It is clarified that the issue of challenge to the vires is kept open.
9. No further proceedings for recovery of the balance amount shall be taken against the petitioner in case of the authorities being satisfied that the condition of pre-deposit for filing the appeal has been complied The petitioner shall also deposit the refunded amount received on these transactions under IGST.
10. The GST Tribunal has not been constituted till date, the petitioner shall file an appeal within three months from the date of constitution of the Tribunal. The Tribunal shall consider the appeal on merits after being satisfied that the condition of pre-deposit has been complied with.
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