IMPORTANT POINT
Input Tax Credit cannot be compelled to be reversed without due process, and restoration is required if reversal occurs under duress.

JUDGMENT :

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. Heard learned Senior Advocate Mr.Mihir Joshi with learned advocate Mr.Dhaval Shah for the petitioner and learned advocate Mr.Ankit Shah for the respondents.

2. Issue Rule, returnable forthwith. Learned advocate Mr.Ankit Shah waives service of notice of rule for and on behalf of the respondents.

3. With regard to the controversy arising in this petition which is in narrow compass, the same is taken up for hearing with the consent of the learned advocates of the parties.

4. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs :

“A. Your Lordships be pleased to issue a Writ of Mandamus of a writ in alun the nature of Mandamus or any other writ, order or direction under Article 226 of the Constitution of India to declare that the ITC of Rs. 9,83,53,032 availed by the Petitioner in the month of July 2021 on Tax Invoice No. VI2124000047 dated 23.07.2021 and VI2124000052 dated 29.07.2021 as validly availed in terms of the provisions of 9 Section 76 of the Act;

B. Your Lordships be pleased to issue a Writ of Mandamus or a writ in the nature of Mandamus or any other writ, order or direction under Article 226 of the Constitution of India to declare that the amount of Rs. 9,83,53,032 deposited by the Petitioner vide DRC-03 on 13.01.2013 is not payable in law and is therefore collected without the authority of law, in violation of Article 265 of the Constitution of India and contrary to the provisions of Section 16 read with Section 41 and Section 73/74 of the CGST Act;

C. Your Lordships be pleased to issue a writ of Mandamus, or a writ in the nature of Mandamus, or any other appropriate writ, order or direction, directing the Respondents, their servants, agents or representatives to forthwith restore the ITC of Rs. 9,83,53,032 in ECL of Petitioner as if the said ITC has never been reversed.”

5. At the outset, learned Senior Advocate Mr.Mihir Joshi for the petitioner submitted that in view of the subsequent development, prayer A is not pressed and only prayers B and C would survive.

6. The brief facts of the case are as under :

6.1. The petitioner is engaged in manufacturing and exporting of goods of its overseas parent Company i.e. Hilti Aktiengesellschaft and also undertakes research and development for the said Company.

6.2. The petitioner entered into transaction or purchase of the leasehold rights over land with the Sun Pharmaceutical Industries Limited in Month of March, 2021. The petitioner received the Tax Invoices dated 23rd July, 2021 and 29th July, 2021 in respect of the purchase of leasehold rights along with GST aggregating to Rs.9,83,53,032/-.

6.3. The petitioner exported the goods to its overseas parent Company in Month of July, 2021 and also filed Form GSTR-3B on 20th August, 2021 for the month of July, 2021 and availed the Input Tax Credit (for short ‘the ITC’) of Rs.9,83,53,032/- which was reflected in its Form GSTR-2A for the said month.

6.4. On 03.01.2023, the petitioner filed refund claim of Rs.9,73,40,675/- along with the letter dated 08.12.2022 of accumulated Input Tax Credit on account of exports under Section 54(3) of the Central Goods and Services Tax Act, 2017 (for short ‘the CGST Act’) read with Section 16(3)(a) of the Integrated Goods and Services Tax Act, 2017 (for short ‘the IGST Act’) through Form RFD- 01.

6.5. It is the case of the petitioner that the respondent No.4-Senior Intelligence Officer, Directorate General of GST Intelligence, Vadodara Unit visited the premise of the petitioner on 12.01.2023 and made inquiries about the ITC availed by the petitioner on the aforesaid Tax Invoices and asserted that such ITC was wrongly claimed and insisted that the petitioner must reverse the same. The respondent No.4 also issued summons to the petitioner to appear in person before him on 13th January, 2023 and petitioner had to agree to reverse the ITC and submit the letter to that effect on same day i.e.