2020 (9) TMI 978 - HC - GST

Maintainability of petition - availability of alternative remedy - Refund of unutilized ITC - inverted duty structure - Circular No.59/33/2018-GST dated 04.09.2018 (Annexure-4) issued by the Central Board of Indirect Taxes and Customs - HELD THAT - Since an efficacious statutory remedy is available to the petitioner to assail the legality and validity of the order passed under Annexure-5, this Court should be slow in entertaining the writ petition at this stage. The petitioner has also not made out any ground for interference with the order under Annexure-5 in a writ petition which he cannot raise before the Appellate Authority. The grounds raised by the petitioner can be considered by the Appellate Authority in exercise of power under Section 107 of the Act. This Court without interfering with the impugned order under Annexure-5, disposes of this writ petition granting liberty to the petitioner-Company to assail the legality and validity of Annexure-5 under Section 107 of the Act - Petition disposed off.

Summary

Issues:
Petitioner seeks direction to set aside order rejecting refund of unutilized ITC due to inverted duty structure. Petitioner requests a reasoned order in line with Circular No.59/33/2018-GST. Respondent argues writ petition is not maintainable due to statutory appeal remedy under Section 107 of the Act. Petitioner contends impugned order is void ab initio for lack of hearing opportunity. Court deliberates on maintaining writ petition versus statutory appeal remedy.

Analysis:
The petitioner, a fertilizer manufacturer, sought refund of unutilized Input Tax Credit (ITC) due to an inverted duty structure, where inputs attract a higher GST rate than outward supplies. The petitioner applied for refund, but the Assistant Commissioner issued a show-cause notice proposing rejection. Despite the petitioner's reply, the Assistant Commissioner issued a non-speaking order electronically, prompting the petitioner to challenge it. The petitioner argued the order lacked application of mind and prayed for a reasoned order considering the Circular at hand.

The respondent, representing CGST and Central Excise, contended that the petitioner had a statutory remedy under Section 107 of the Act through appeal, rendering the writ petition not maintainable. While the petitioner did not dispute the availability of the statutory remedy, they highlighted the lack of hearing opportunity and the cryptic nature of the impugned order, asserting its voidness from the beginning.

Upon considering the submissions, the Court acknowledged the statutory appeal route for challenging the impugned order's legality and validity. The Court emphasized the availability of grounds for review before the Appellate Authority under Section 107 of the Act, indicating that the petitioner's concerns could be addressed through that process. Consequently, the Court disposed of the writ petition, granting the petitioner liberty to challenge the order under Section 107 of the Act.

In conclusion, the Court refrained from interfering with the impugned order but permitted the petitioner to pursue the statutory appeal within 15 days, ensuring a decision within three months. The Court's decision balanced the availability of statutory remedies with the petitioner's concerns, providing a clear path for addressing the refund dispute within the legal framework.