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2023 Supreme(Kar) 1397
IN THE HIGH COURT OF KARNATAKA
B.M. Shyam Prasad, J.
M/s. Nuance Group (India) Pvt. Ltd. – Petitioner
Versus
The Union of India and Others – Respondents
Writ Petition Nos. 5077, 7826 of 2022, Writ Petition No. 23144 of 2021
Decided On : 20-01-2023
Advocate Appeared:
For the Petitioner: Ravi Raghavan
For the Respondent: Amit Anand, K. Hema Kumar, Mallahar Rao
Subject
Taxation - Goods and Services Tax
Act Referred
Headnote
(B) Refund - Concept of Input Tax Credit - The refusal of refund claims was based on provisions that were subsequently omitted, indicating that considerations for refunds should account for such legislative changes. (Paras 1-4)
Facts of the case:
The petitioner, a company, challenged the rejection of refund applications regarding ITC, citing the retrospective removal of Rule 95A and the rescindment of the associated circular. The petitioner's arguments referenced prior legal precedents and the implications of the recent legislative changes.
Findings of Court:
The impugned orders rejecting the refund claims were quashed, and the matters were restored for reconsideration regarding the refund of ITC and reversal claims.
Issues: The core issue was whether the retrospective omission of Rule 95A and the withdrawal of a circular affect the consideration of refund claims by the petitioner.
Ratio Decidendi: The court found that legislative amendments should be recognized in the evaluation of refund claims, as the disagreement about the premise for the refund was not contested; therefore, all contentions should be open for renewed consideration.
Result: Writ petitions allowed.
| Table of Content |
|---|
| 1. overview of petition details and orders (Para 1) |
| 2. arguments on refund rejection and legislative changes (Para 2) |
| 3. reaffirmation of open consideration by respondent (Para 3) |
| 4. quashing of orders for reconsideration (Para 4) |
ORDER :
1. These petitions are filed calling in question the orders in appeal under the provisions of Section 112 of the Central Goods and Services Tax Act, 2017 (for short, the 'CGST Act) as also the rejection of refund applications filed under Section 54 of the CGST Act read with Rule 89 of the CGST Rules. The details of such orders called in question in these petitions are as follows:
| Writ Petition No. | Order No. | Date |
| 7826/2022 | Order in Appeal No. 221/2021-22/JC-AII/GST | 07.02.2022 |
| 23144/2021 | Refund Rejection Order Nos.06/2021-22(Final)ND-8-GST Refunds and 20/2021-22 (Final)ND-8GST Refunds | 25.04.2021 and 20.05.2021 |
| 5077/2022 | Refund Rejection Order No. Nil/2021-22(Final)ND-8 | 26.10.2021 |
2. Sri. Ravi Raghavan, the learned counsel for the petitioner submits that the petitioner's claim for refund of Input Tax Credit [ITC] is rejected for the reason that the petitioner has sought such refund under the provisions of Rule 95A and the Circular No. 106/25/2019/GST dated 29.06.2019, and the petitioner's claim for reversal of ITC, an additional question that is canvassed in W.P.No. 23144/2021, is also rejected overlooking the decision of the Hon'ble Bombay High Court in Sandeep Patil v. Union of India 2019-VIL-495-BOM, and other decisions. During the pendency of this writ petition, the relevant provision of Rule 95A of the CGST Rules is omitted retrospectively with effect from 01.07.2019 and the Circular dated 29.06.2019 is also withdrawn based on the Council's recommendation and in this regard, he draws this Court's attention to the Paragraph-14 of the Recommendations:
"14. Supplies from duty free Shops (DFS) at international terminal to outgoing international passengers to be treated as exports by DFS and consequential refund benefit to be available to them on such supplies. Rule 95A of the CGST Rules, Circular No. 106/25/2019-GST dated 29.06.2019 and related notification to be rescinded accordingly."
3. Sri. Ravi Raghavan submits that consequentially the impugned orders will have to be quashed and restored for reconsideration. Sri. Amit Deshpande, the learned Counsel for the respondent, does not dispute the premise in which the refund is sought for and he emphasizes that all questions otherwise may be left open for consideration including the consideration of the petitioner's prayer for reversal of ITC based on the decision in Sandeep Patil, supra.
4. For the foregoing, the writ petitions are allowed quashing the aforesaid impugned orders and restoring the proceedings for reconsideration leaving open all contentions by both the parties.
