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2021 Supreme(Sikk) 67
HIGH COURT OF SIKKIM
Meenakshi Madan Rai, Bhaskar Raj Pradhan, JJ.
Glenmark Pharmaceuticals Limited - Appellant
Versus
Union of India & Ors. - Respondents
Writ Petition (Civil) No. 48 of 2020
Decided On : 24-11-2021
Mr. Rahul Tangri and Mr. Aditya Makkhim Advocates, for the Petitioner; Mr. Ajay Rathi, Senior Standing Counsel with Mr. Dilip Kumar Agarwal, Junior Standing Counsel, for the Respondents
Eligibility for budgetary support under GST cannot be denied solely based on the timing of Unique ID registration when the petitioner's claims were valid and timely submitted post-registration.
Headnote:(A) Goods and Services Tax Act - Notification No. 10(1)/2017-DBA-II/NER dated 05.10.2017 - Writ Petition challenging rejection of claims for budgetary support under GST for periods prior to unique ID registration - The petitioner was found to be eligible under the scheme but claims were denied due to late submission following UID issuance. (Paras 2-5)
(B) Legal Principle - The necessity of obtaining Unique ID for claiming budgetary support as enshrined in Notification - The court emphasized that administrative delays should not bar legitimate claims of eligible units. (Paras 16)
Facts of the case:
The petitioner, engaged in pharmaceutical manufacturing, filed claims for budgetary support for four quarters before receiving the UID, which was incorrectly rejected by the Assistant Commissioner.
Findings of Court:
The court found that the UID issuance was unduly delayed by the respondents and ordered to process the claims.
Issues: The principal issue was whether the rejection of budgetary support claims due to pre-UID filing was justifiable.
Ratio Decidendi: The court ruled that the rejection based on the timing of UID issuance was unreasonable given the eligibility of the petitioner and administrative failures of the respondent authorities.
Result: The writ petition was allowed, directing the authorities to process the claims beyond mere technical rejection.
JUDGMENT
Bhaskar Raj Pradhan, J. - The dispute in the present writ petition lies in a narrow compass and relates to the rejection of the petitioners claims for budgetary support under a “Scheme of Budgetary Support under Goods and Service Tax” regime on the ground that the claims were made for the period prior to the registration which is impermissible.
2. The writ petitioner is engaged in the manufacture and supply of pharmaceutical products at their unit situated in Sikkim. They seek to challenge four orders, all dated 05.12.2019 (the impugned orders), passed by the Assistant Commissioner, Central Goods and Service Tax, Gangtok Division, Gangtok rejecting the four claims for budgetary support for four quarters filed by the petitioner under Notification No. 10(1)/2017-DBA-II/NER dated 05.10.2017 (notification dated 05.10.2017) for the period July, 2017 to June, 2018.
3. The impugned orders record that the petitioner has been assigned with the unique ID (UID) registration number UNQSBS11AAACG2207L1Z50001 upon validating them to be eligible for “Scheme of Budgetary Support under GST” (the scheme) in terms of CBEC Circular No. 1060/9/2017-CX dated 27.11.2017 (Circular dated 27.11.2017) read with Notification dated 05.10.2017. Thus, as rightly contended by Mr. Rahul Tangri, Learned Counsel for the petitioner, that the petitioner was eligible under the scheme is not in controversy.
4. The impugned orders records that the petitioner filed an application dated 02.11.2018 in terms of paragraph 7.1 of the scheme in the prescribed format claiming budgetary support for the quarters ending September, 2017, December, 2017, March, 2018 and June, 2018 in relation to supply of specified goods. The petitioner had been issued UID on 31.10.2018 whereas they have claimed for budgetary support for the period prior to the issuance of UID in terms of Notification dated 05.10.2017 which mandatorily required pre-registration. Further, as per paragraph 7.1 claim for budgetary support is required to be submitted by the 15th of succeeding month after end of quarter after payment of tax relating to the quarter to which the claim relates. However, as per show-cause notice issued dated 28.06.2019 it has been alleged that the petitioner availed ineligible TRAN 1 credit which is yet to be proved otherwise by them. As per the impugned orders since the petitioner had not complied with the provision of the notification dated 05.10.2017 their claim for budgetary support under the scheme is liable to be rejected.
5. The respondents’ counter affidavit takes a stand that the claim for budgetary support for the period July, 2017 to June, 2018 was filed belatedly in violation of Notification dated 05.10.2017. It is contended that as per the Notification dated 05.10.2017 to claim budgetary benefit, one must have UID number which as per records was allocated on 31.10.2018 against the online application filed by the petitioner. The respondents also clarify that although in annexure P-8 the date of approval of the UID is mentioned as 31.07.2018 it is in fact 31.10.2018. It is thus contended that despite getting UID number on 31.10.2018, the petitioners have made their claims only on 02.11.2018 for the period from July, 2017 to June, 2018 which period is prior to the allocation of UID to the petitioner.
6. Notification dated 05.10.2017 is a Scheme of Budgetary Support under Goods and Service Tax regime to the units located in the States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim. In pursuance of the decision of the Government of India to provide budgetary support to the existing eligible manufacturing units operating in the above named states under different industrial promotion schemes of the Government of India, for a residual period for which each of the units is eligible, a scheme was introduced as a measure of good will. To the extent of the present controversy clause 7 and 8 are the relevant clauses of the Notification dated 05.10.
