Globus Real Infra Pvt Ltd VS Additional Commissioner

the petitioner against an earlier decision. The petitioner challenges the Order-in-Appeal No. 345/2021-2022 dated 31.03.2022 issued by the Commissioner of Central Tax Appeals-II, New Delhi. This order, referred to as ‘the impugned order’, was issued by the Appellate Authority. In the impugned order, the Appellate Authority dismissed the petitioner’s appeal.

The petitioner has filed a writ petition challenging Order-in-Appeal No. 345/2021-2022, dated 31.03.2022, issued by the Commissioner of Central Tax Appeals-II, New Delhi (referred to as ‘the Appellate Authority’). This order dismissed the petitioner’s appeal against an earlier Order-in-Original dated 06.04.2021. The Order-in-Original had rejected the petitioner’s application for a refund amounting to ₹4,24,16,574/- under Section 54 of the Central Goods and Services Tax Act, 2017 (referred to as ‘CGST Act’). The petitioner contends that the Appellate Authority’s decision was erroneous, and seeks judicial review of this decision through the writ petition.

The petitioner has filed a writ petition challenging Order-in-Appeal No. 345/2021-2022 dated 31.03.2022 issued by the Commissioner of Central Tax Appeals-II, New Delhi (referred to as ‘the Appellate Authority’). The impugned order dismissed the petitioner’s appeal against an order-in-original dated 06.04.2021, which had rejected the petitioner’s application for a refund of ₹4,24,16,574/- under Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act).

The dispute arises from a “Memorandum of Agreement for Lease” entered into by the petitioner with Bhushan Steel Limited (now Tata Steel BSL Limited) on 01.04.2015. Pursuant to this agreement, the petitioner leased Farm House no. 20, 19th Avenue Mulsari, Village Rajokri, Tehsil Vasant Vihar, New Delhi (referred to as ‘the property’) to Bhushan Steel Limited.

However, on 26.07.2017, State Bank of India, a financial creditor of Bhushan Steel Limited, initiated Corporate Insolvency Resolution Process (CIRP) against Bhushan Steel Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’). This was due to Bhushan Steel Limited’s default in repayment of financial assistance obtained from the bank, leading to the admission of the insolvency petition and appointment of an Interim Resolution Professional.

The crux of the petitioner’s grievance is that despite the lease agreement and the financial arrangement with Bhushan Steel Limited, which resulted in insolvency proceedings, the Appellate Authority upheld the rejection of the petitioner’s refund claim under CGST Act Section 54. The petitioner contends that the lease transaction qualifies for a refund under the CGST Act, and challenges the Appellate Authority’s decision on grounds of procedural and substantive errors.

The writ petition seeks judicial review of the Appellate Authority’s decision, arguing for the refund eligibility based on the lease agreement and the petitioner’s compliance with relevant tax provisions.

The petitioner has initiated a writ petition challenging Order-in-Appeal No. 345/2021-2022 dated 31.03.2022 (referred to as ‘the impugned order’), issued by the Commissioner of Central Tax Appeals-II, New Delhi (referred to as ‘the Appellate Authority’). The impugned order upheld the dismissal of the petitioner’s appeal against an order-in-original dated 06.04.2021, which had rejected their application for a refund amounting to ₹4,24,16,574/- under Section 54 of the Central Goods and Services Tax Act, 2017 (referred to as ‘CGST Act’).

The background of the case involves a Memorandum of Agreement for Lease entered into by the petitioner on 01.04.2015 with Bhushan Steel Limited (now Tata Steel BSL Limited), leasing out property known as Farm House no. 20, 19th Avenue Mulsari, Village Rajokri, Tehsil Vasant Vihar, New Delhi (referred to as ‘the property’) to BSL.

Subsequently, on 26.07.2017, State Bank of India, a financial creditor of BSL, initiated Corporate Insolvency Resolution Process (CIRP) against BSL under Section 7 of the Insolvency and Bankruptcy Code, 2016 (referred to as ‘the Code’) due to default in repayment. During the CIRP, the Resolution Professional identified the petitioner as a connected entity of BSL, citing that employees of BSL served as directors of the petitioner at the relevant time. The lease agreement under the Memorandum of Agreement for Lease was deemed by the Resolution Professional to constitute a preferential transaction under Section 43 of the Code.

In challenging the impugned order, the petitioner contests the dismissal of their refund claim under CGST Act, arguing that the lease transaction should not be treated as preferential under the insolvency proceedings. The writ petition seeks judicial review and relief against the Appellate Authority’s decision, emphasizing procedural fairness and statutory interpretation concerning tax refunds in the context of insolvency-related transactions.

The petitioner has filed a writ petition challenging Order-in-Appeal No. 345/2021-2022 dated 31.03.2022 (referred to as ‘the impugned order’) issued by the Commissioner of Central Tax Appeals-II, New Delhi (‘the Appellate Authority’). This order dismissed the petitioner’s appeal against an earlier order-in-original dated 06.04.2021, which had rejected the petitioner’s application for a refund of ₹4,24,16,574/- under Section 54 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’).

The dispute originates from a Memorandum of Agreement for Lease entered into on 01.04.2015, wherein the petitioner leased property located at Farm House no. 20, 19th Avenue Mulsari, Village Rajokri, Tehsil Vasant Vihar, New Delhi (‘the property’) to Bhushan Steel Limited (now Tata Steel BSL Limited). Subsequently, Bhushan Steel Limited faced financial distress leading to insolvency proceedings initiated by State Bank of India on 26.07.2017 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’). During the Corporate Insolvency Resolution Process (CIRP), the petitioner was identified as a connected entity of Bhushan Steel Limited by the Resolution Professional due to shared directorship between their employees.

Tata Steel Limited, as a resolution applicant, submitted and had a resolution plan approved for Bhushan Steel Limited, including during this period. The petitioner claims that due to non-payment of lease rentals, it was compelled to sell the property on 12.09.2018 to settle bank dues.

In pursuit of recovering GST paid on lease rentals, the petitioner filed a refund application under Section 54 of the CGST Act on 18.11.2020 with the Assistant Commissioner, Central Goods and Services Tax, South Delhi. The Adjudicating Authority, instead of processing the application, issued a show cause notice on 11.01.2021 asking the petitioner to justify why the refund claim should not be rejected. The petitioner responded to this notice but subsequently faced dismissal of their appeal by the Appellate Authority through the impugned order.

The crux of the petitioner’s grievance lies in the rejection of their refund claim under CGST Act Section 54, citing procedural and possibly substantive grounds related to the lease agreement and its implications during the insolvency proceedings of Bhushan Steel Limited. The petition seeks judicial review of the Appellate Authority’s decision, emphasizing procedural fairness and interpretation of tax refund entitlements under the CGST Act.

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