Atibir Industries Co. Ltd VS Union Of India

The court convened to hear arguments from multiple parties represented by their respective legal counsel. Mr. Sumeet Gadodia presented the case for the petitioner, articulating the petitioner’s arguments and legal standpoint. Representing Respondent Nos. 1 to 4, Mr. Ratnesh Kumar provided counterarguments and legal defenses. Additionally, the Advocate General of Jharkhand, Mr. Rajiv Ranjan, along with Mr. P.A.S. Patti, S.C.-IV, represented the Respondent-State, adding further perspectives and defenses on behalf of the state. Each counsel presented their arguments to the court for consideration in the ongoing legal proceedings.

The proceedings involved a writ petition where Mr. Sumeet Gadodia represented the petitioner, Mr. Ratnesh Kumar represented Respondent Nos. 1 to 4, and Mr. Rajiv Ranjan, along with Mr. P.A.S. Patti, represented the Respondent-State. The petitioner sought a mandamus to compel the respondents to either open the GSTN Portal for the petitioner to file its refund application (Form GST RFD-01) or to manually accept the refund application for the periods 2017-18 and 2018-19. This application was for refund of unutilized Input Tax Credit (ITC) related to compensation cess, claiming entitlement under the law. Additionally, the petitioner requested a directive for the authorities to process and decide on the refund claim once the application was accepted.

The summary pertains to a legal proceeding where Mr. Sumeet Gadodia, representing the petitioner, has filed a writ petition seeking a mandamus (a judicial order) against the respondents. The petitioner, a manufacturer primarily involved in Sponge Iron production under the jurisdiction of Respondent No. 6, is seeking relief related to the Goods and Services Tax (GST) regime.

The petitioner claims entitlement to a refund of unutilized Input Tax Credit (ITC) related to compensation cess for the periods 2017-18 and 2018-19. This refund application is currently hindered due to the inability to file it electronically on the GSTN Portal or to have it manually accepted by the authorities.

In response to the petition, Mr. Ratnesh Kumar appears for Respondent Nos. 1 to 4, while Mr. Rajiv Ranjan, the Advocate General of Jharkhand, represents the Respondent-State along with Mr. P.A.S. Patti.

The legal context involves the GST Act, 2017 and the Goods and Services Tax (Compensation of States) Act, 2017 (Compensation Act), effective from July 1, 2017. The Compensation Act includes provisions for levying “Compensation Cess” on specific commodities, including coal, which is crucial for the petitioner’s manufacturing process.

The petitioner seeks two main reliefs through the writ petition:

1. Mandamus to open the GSTN Portal to allow filing of the refund application in Form GST RFD-01.

2. Alternatively, to have the refund application manually accepted by the authorities.

Additionally, the petitioner requests a direction to the respondent-authorities to process and determine the refund claim promptly once the application is accepted.

The case revolves around the petitioner’s need for refund of ITC related to compensation cess on coal, which is essential for its manufacturing operations.

wishes to claim refund of such accumulated ITC, could claim the refund of unutilized compensation cess. The circular clarified that the unutilized ITC of compensation cess could be claimed as a refund under the provisions of GST law, even if the final product is not subject to compensation cess.

The petitioner, in this case, Sumeet Gadodia, sought relief through a writ petition, requesting either the opening of the GSTN Portal to enable filing of their refund application in Form GST RFD-01, or manual acceptance of their refund application for the periods 2017-18 and 2018-19. They claimed entitlement to refund of unutilized Input Tax Credit (ITC) pertaining to compensation cess under applicable laws.

The petitioner, primarily engaged in the manufacture of Sponge Iron, relies on coal as a key raw material sourced domestically from subsidiaries of Coal India Ltd. and through imports. The Goods and Services Tax (GST) Act and the Compensation of States Act, effective from July 1, 2017, impose compensation cess on specific goods including coal. This cess is also applicable via Reverse Charge Mechanism on imported coal.

Section 16 of the GST Acts allows for claiming excess ITC as refund, which includes compensation cess paid on inputs. However, confusion arose among dealers regarding the availability of ITC under CGST for compensation cess levied separately under the Compensation Act, especially when the final product (like sponge iron) isn’t subject to compensation cess.

To address this, a circular dated December 31, 2018 (Annexure-5), issued by the Central Board of Indirect Taxes & Customs clarified that dealers could indeed claim refund of unutilized ITC of compensation cess, regardless of whether the final product attracts compensation cess or not.

The Advocate General of Jharkhand, Rajiv Ranjan, represented the Respondent-State, along with other counsels appearing for Respondent Nos. 1 to 4. The case essentially hinges on the interpretation and application of GST laws vis-à-vis compensation cess, seeking clarity and relief through judicial intervention.

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