IMPORTANT POINT
Consistency in taxation is fundamental to fostering fairness, transparency, and predictability within the tax regime. Tax authorities must adhere to consistent interpretations and applications of tax laws and regulations to ensure equitable treatment of taxpayers.

JUDGMENT :

Shekhar B. Saraf, J.

1. M/s Samsung India Electronics Private Limited (hereinafter referred to as the “Petitioner”) has preferred the instant writ petitions under Article 226 of the Constitution of India challenging the order of the Additional Commissioner, Grade – 2 (Appeal) – I, Commercial Tax, NOIDA.

2. The facts and submissions made in the instant writ petitions bearing Writ Tax Nos. 777 of 2022 and 660 of 2023 are similar except for the relevant period and refund amount in question and hence, they are being taken up together.

FACTS

3. The factual matrix leading up to the instant writ petitions has been laid down below:

a. The petitioner is a company engaged in the export of Information Technology design and software development services pertaining to mobile devices (“IT Services”) to its overseas holding company, namely, M/s Samsung Electronics Company Limited, Korea (hereinafter referred to as the “SEC Korea”) in terms of prevalent service agreement dated January 1, 2019. Such export of IT services is made by the Petitioner under Letter of Undertaking (hereinafter referred to as the “LOU”) without payment of IGST which constitutes zero rated supply as per Section 16 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the “IGST Act, 2017”)

b. For rendering IT Services to SEC Korea, the Petitioner procures various inputs, input services, and capital goods and accordingly avails ITC of the CGST, SGST, and IGST paid thereon, in accordance with the applicable provisions of the GST laws.

c. The Petitioner had filed a refund claim of unutilised ITC of CGST, SGST, and IGST paid on various inputs and input services for the period of April 2019 to June 2019. After due consideration by the Department, said refund claim amounting to Rs.6,36,69,447/-was sanctioned by the Department barring for an amount of Rs.7,500/- on the ground of claiming refund of unutilised ITC on invoices missing in the GSTR-2A returns.

d. The Petitioner then filed for the refund of the unutilised ITC of CGST, SGST, and IGST paid on various inputs and input services, for the period of July – September, 2019 amounting to Rs.7,46,52,231/-and October – December, 2019 amounting to Rs.8,20,59,875/-. Against the aforesaid refund applications, deficiency memos under FORM GST-RFD-03 and later show cause notices were issued by the Department proposing to reject the refund for the aforesaid periods.

e. Thereafter, the Petitioner filed a reply to the show cause notices and attended personal hearing, after which the Department partially allowed the refund and rejected a portion of the demand on the ground that the specific goods are capital goods, and not inputs vide orders dated April 28, 2021 and November 8, 2021.

f. Thereafter, the Petitioner filed appeals against the aforesaid orders dated April 28, 2021 and November 8, 2021. The said appeals were rejected vide orders dated October 25, 2021 and February 24, 2023.

g. Aggrieved by the order dated October 25, 2021, the Petitioner preferred the Writ Tax No.777/2022 before this Court and aggrieved by the order dated February 24, 2023, the Petitioner preferred the Writ Tax No. 660/2023 before this Court.

CONTENTIONS OF THE PETITIONER

4. Sri M.P. Devnath, learned counsel appearing on behalf of the Petitioner has made the following submissions:

a. The Department has adopted an inconsistent approach in dealing with the refund applications of the Petitioner, despite the fact that each of the refund applications arise out of the same set of facts and circumstances, which is grossly incorrect in law.

b. It is imperative to mention that for the subsequent and prior periods, except the period from July 2019 to March 2020, the refund claims have duly been sanctioned to the Petitioner on the same facts and circumstances only.

c. It is a settled position of law that the Department cannot take contrary stand and adopt an inconsistent approach while dealing with the same set of facts as well as legal