Garden Silk Mills Ltd VS Union of India

Mr. Nirzar Desai, the learned senior standing counsel, has waived the service of notice of the rule on behalf of the respondents. This petition, filed under Article 226 of the Constitution of India, seeks several substantive reliefs:

1. Set Aside Impugned Orders and Refund:

* The petitioner requests the Hon’ble Court to set aside the impugned orders and allow a refund amounting to Rs. 17,55,13,818/-.

2. Writ of Mandamus:

* The petitioner seeks a Writ of Mandamus or any other appropriate writ, order, or direction from the Hon’ble High Court to instruct respondent No. 3 to grant the refund of Rs. 17,55,13,818/-.

3. Alternative Relief for Re-credit:

* Alternatively, the petitioner requests the Hon’ble Court to permit them to re-credit the amount of Rs. 17,55,13,818/- in their Electronic Credit Ledger based on Form GST RFD-PMT 03 issued by respondent No. 3. This re-credit should be allowed at the time of filing the Monthly Summary Return (GSTR 3B) or the Hon’ble Court should direct respondent No. 3 to grant such re-credit immediately in Form GST RFD-01B.

The petition essentially aims to either secure a direct refund or to enable the re-credit of the specified amount in the petitioner’s electronic credit ledger, addressing the financial concerns related to the impugned orders.

In this legal matter, Mr. Nirzar Desai, a senior counsel, has waived the service of notice of rule on behalf of the respondents. The petitioner, under article 226 of the Constitution of India, is seeking several substantive reliefs through this petition. Specifically, the petitioner requests the Hon’ble Court to set aside certain impugned orders and allow the refund of Rs. 17,55,13,818. The petition also seeks the issuance of a Writ of Mandamus or another appropriate order directing respondent No. 3 to grant this refund. Alternatively, the petitioner asks the court to permit them to re-credit the specified amount in their Electronic Credit Ledger via Form GST RFD-PMT 03 when filing their Monthly Summary Return – GSTR 3B or to instruct respondent No. 3 to facilitate this re-credit immediately through Form GST RFD-01B.

The petitioner is involved in the manufacture of various products including Polyester Filament Yarns, Textile-grade Polyester Chips, Grey Fabrics, and Finished Fabrics. These products are either cleared for home consumption or dispatched to Special Economic Zones (SEZ). The matter concerns Section 54(3) of the Central Goods and Services Tax (CGST) Act, which is pertinent to the refund claims related to taxes paid on the goods manufactured and cleared. The legal proceedings seek to resolve issues related to the refund process and the petitioner’s entitlement to the claimed amount under the relevant tax laws.

The case in question involves a petition under Article 226 of the Constitution of India, filed by the petitioner, who is involved in the manufacturing of various textile products including Polyester Filament based Yarns, Textile-grade Polyester Chips, Grey Fabrics, and Finished Fabrics. The petitioner’s products are either cleared for home consumption or exported to Special Economic Zones (SEZ).

The primary relief sought by the petitioner is the refund of Rs. 17,55,13,818/-, which is claimed to be unutilised input tax credit under Section 54(3) of the Central Goods and Services Tax Act, 2017 (CGST Act). This section allows registered persons to claim a refund of unutilised input tax credit at the end of any tax period under certain conditions, such as zero-rated supplies made without tax payment or situations where the input tax rate exceeds the output tax rate, excluding certain notified supplies.

The petition is spearheaded by Mr. Nirzar Desai, a learned senior standing counsel, who has waived the service of notice of the rule on behalf of the respondents. The petitioner requests the High Court to set aside the orders in question and direct the refund of the specified amount. Additionally, the petitioner seeks a Writ of Mandamus or other appropriate writs to compel respondent No. 3 to grant this refund. Alternatively, the petitioner requests permission to re-credit the amount in question to their Electronic Credit Ledger, based on Form GST RFD-PMT 03, or for the Court to instruct respondent No. 3 to process this re-credit immediately through Form GST RFD-01B.

The crux of the petition hinges on the interpretation and application of the provisions under the CGST Act related to input tax credit refunds and the procedural requirements for claiming such refunds. The petitioner argues that the conditions for a refund under Section 54(3) have been met and seeks judicial intervention to secure the refund of the accumulated input tax credit.

The case in question revolves around a petition filed under Article 226 of the Constitution of India by the petitioner, who is involved in the manufacture of Polyester Filament Yarns, Textile-grade Polyester Chips, Grey Fabrics, and Finished Fabrics. These products are either consumed domestically or exported to Special Economic Zones (SEZs). The central issue pertains to a claim for a refund of Rs. 17,55,13,818, which the petitioner asserts is due under the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act).

The petition is supported by Mr. Nirzar Desai, a senior counsel, who has waived the service of notice of the rule on behalf of the respondents. The petitioner’s primary request is for the High Court to set aside the impugned orders and to facilitate the refund of the aforementioned amount. The reliefs sought include a Writ of Mandamus or other appropriate orders to direct the respondent to issue the refund. Alternatively, the petitioner seeks permission to re-credit the amount in their Electronic Credit Ledger, based on the Form GST RFD-PMT 03, or to direct the respondent to grant this re-credit through Form GST RFD-01B immediately.

Under Section 54(3) of the CGST Act, a registered person is eligible to claim a refund of unutilized input tax credit at the end of any tax period, provided the person has made zero-rated supplies without payment of tax, or has accumulated credit due to a higher tax rate on inputs compared to outputs, except in cases where the supplies are nil-rated or fully exempt. The petitioner filed six refund claims from July to October 2017, citing reasons such as the refund of accumulated input tax credit due to an inverted duty structure, supplies made to SEZs without tax payment, and exports without payment of integrated goods and services tax.

The petition emphasizes the procedural requirements outlined in the CGST Rules of 2017 for the processing and approval of such refund claims. The case hinges on whether the refund was rightfully withheld and whether the petitioner’s claim aligns with the statutory provisions for refund under the CGST Act. The outcome of this petition could have significant implications for the petitioner’s financial dealings and compliance with GST regulations.

Download PDF:

For Reference Visit:

Read Another Case Law:

GST Case Law: