Genpact India Pvt. Ltd. Vs Principal Commissioner of GST and CX (Punjab and Haryana High Court)
The Punjab and Haryana High Court considered a writ petition seeking issuance of a writ of certiorari to quash Demand-cum-Show Cause Notice No. 47/GST/GGM/2020-21 dated 30.03.2021 issued by the Principal Commissioner of GST & Central Excise, Gurugram under Section 73 of the Finance Act, 1994 read with Section 174 of the Central Goods and Services Tax Act, 2017. The impugned notice required the petitioner to explain why the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 should not be invoked for recovery of refund amounting to ₹2,64,92,41,846 and why Service Tax of ₹16,73,74,91,090 should not be demanded and recovered. The accompanying application for taking the rejoinder on record was allowed.
The Court noted that, when notice of motion had been issued on 30.07.2021, reference was made to CWP-6048-2021, Genpact India (P.) Ltd. vs. Union of India and others, in which the petitioner had challenged rejection of refund of unutilized Input Tax Credit used for making zero-rated supplies of services under the GST regime. In that earlier petition, the petitioner had contended that refunds had consistently been granted under the service tax regime from the financial year 2005-06 onwards and, applying the principle of consistency, refunds under the GST regime should also be granted.
The petitioner submitted that the impugned notice had been issued as a counterblast after filing CWP-6048-2021 and that the judgment dated 11.11.2022 in that case completely covered the present matter. According to the petitioner, the High Court had already held in the earlier judgment that the petitioner was not an “intermediary” and had therefore allowed the refund claim of unutilized Input Tax Credit used for making zero-rated supplies of services without payment of IGST.
The petitioner further submitted that the respondents had implemented the judgment dated 11.11.2022 by passing a detailed order, had initially decided to file a Special Leave Petition before the Supreme Court, and had subsequently sanctioned refund of ₹21,98,06,002 for the period April 2019 to June 2019 through the Deputy Director, Division East-II, Central Tax GST, Gurugram. It was also submitted that, by letter dated 08.05.2023 issued by the CBIC, the respondents decided not to file a Special Leave Petition against the judgment dated 11.11.2022.
The High Court observed that the respondents had consciously decided not to file a Special Leave Petition against its earlier judgment in Genpact India (P.) Ltd. Consequently, the Court held that the ratio laid down in that judgment was directly applicable to the present case.
Accordingly, the writ petition was allowed and the Demand-cum-Show Cause Notice dated 30.03.2021 was set aside.
Cases Discussed
- Genpact India (P.) Ltd. vs. Union of India and others (Punjab & Haryana High Court), (2022) 1 Centax 226 (P&H)
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. CM-6621-CWP-2022
Application is allowed and rejoinder to reply filed by the respondents is taken on record.
2. CWP-14151-2021
The petitioner is seeking writ of certiorari for quashing and setting aside Demand cum Show cause Notice No. 47/GST/GGM/2020-21 dated 30.03.2021 (‘impugned notice”) (Annexure P-29) issued by Principal Commissioner of GST & CX, Gurugram-respondent No.1 under Sections 73 of the Finance Act, 1994 (“Act, 1994”) read with Section 174 of Central Goods & Services Tax Act, 2017 (“CGST Act”) requiring the petitioner to explain why the extended period of limitation in terms of proviso to Section 73(1) of the Finance Act, 1994 should not be invoked for recovery of refund of Rs.2,64,92,41,846/- granted to the petitioner. The impugned notice further requires the petitioner to explain why service tax of Rs.16,73,74,91,090/- should not be demanded and recovered from the petitioner.
3. On 30.07.2021, when notice of motion was issued, reference was made to CWP-6048-2021 titled as Genpact India (P) Ltd. vs. Union of India and others, (2022) 1 Centax 226 (P&H), decided on 11.11.2022 in which notice had already been issued and was pending for consideration. In that writ petition, the petitioner had challenged order dated 15.02.2021 whereby refund claim of un-utilized Input Tax Credit (ITC) used in making zero rated supplies of services under GST regime had been rejected. The main ground of the petitioner in that writ petition was that refunds had been granted to the petitioner consistently for all financial years starting from 2005-06 under the service tax regime and, therefore, on the principle of consistency, refunds under the GST regime should also be granted.
4. Learned counsel for the petitioner had argued that impugned notice has been issued as a counterblast after filing of CWP-6048-2021, for recovery of Rs.26,34,61,625/-and the said amount should not be demanded from the petitioner.
5. Learned counsel for the petitioner has stated that the judgment dated 11.11.2022 passed in CWP-6048-2021 fully covers the case of the petitioner as in that case, this Court, vide detailed judgment, held that the petitioner was not “intermediary” and, therefore, the refund claim of un-utilized Input Tax Credit (ITC) used in making zero rated supplies of services without payment of IGST was allowed.
6. Learned counsel for the petitioner has further stated that the respondents have implemented the judgment dated 11.11.2022 passed in WP-6048-2021 by detailed order and also decided to file SLP in the Hon’ble Supreme Court. Finally refund for an amount of Rs.21,98,06,002/-for the period April 2019 to June 2019 has been sanctioned by the Deputy Director Division East-II, Central Tax GST Gurugram. It is further stated therein that as per the letter dated 08.05.2023 issued by CBIC, the respondents have decided not to file SLP against the judgment dated 11.11.2022 passed in CWP-6048-2021.
7. Hence, this Court is of the view that since the respondents have taken conscious decision not to file SLP against the judgment dated 11.11.2022 passed in CWP-6048-2021, the ratio of Genpact India (P.) Ltd’s case (supra) is directly applicable in this case.
8. Writ petition is allowed and notice dated 30.03.2021 (Annexure P-29) is set aside.
