2020 (11) TMI 475 - HC - GST

Refund of the CGST and 50% of the IGST paid - reducing benefit of exemption / incentive scheme from central excise era - Scope of the amendments - Alteration / Amendment in the writ petition - vires of Section 174(2)(c) of the Central Goods and Services Tax Act, 2017 and Notification No.21/2017-C.E., dated 1807-2017 - direction to Respondents to fix a special rate of refund eligible to the Petitioner to entitle them to refund equivalent to that available under the erstwhile regime which should also be granted under the budgetary support scheme - HELD THAT - In the matter at hand, the Writ Petition was finally heard on 03-09-2019 and Judgment reserved. In the interim, the Petitioner filed an application being I.A. No.02 of 2019, wherein it was averred that the Hon ble Supreme Court took up the entire batch of appeals filed by the Respondent against the Judgments passed by the Hon ble High Court of Gujarat, Jammu and Kashmir, Guwahati and Sikkim on the issue of curtailment of central excise duty exemption, on 04-09-2019 in the Miscellaneous List. The appeal filed by the Respondent against the Judgment of this High Court dated 21-11-2017 was heard on 05-09-2019 and Judgment reserved. Subsequent thereto, the amendment application being I.A. No.03 of 2020 was filed on 06-06-2020, seeking to incorporate amendments. - By the proposed amendments the Petitioner seeks to challenge the vires of Section 174(2)(c) of the Central Goods and Services Tax Act, 2017 and Notification No.21/2017-C.E., dated 1807-2017, on the ground that it takes away the vested rights of the Petitioner by reducing the exemption/benefits to the Petitioner. The prayers in the Writ Petition are confined to enabling the Petitioner to claim full refund of the CGST and 50% of the IGST paid through the electronic cash ledger. It cannot be said that the Petitioner was unaware of the provision of the statute the vires of which they now seek to assail, nor was it inserted at some point later in time to the filing of the Writ Petition. The question of the Petitioner s inability to raise the matter in spite of due diligence, before the matter was heard or was taken up for hearing, therefore, does not arise. In view of the questions involved in the instant Writ Petition it cannot be said that the amendments are necessary for determining the real question in controversy between the parties considering the prayers of the Petitioner referred above. The proposed amendments if permitted would in fact change the very nature and character of the Writ Petition and introduce an entirely different Cause of action, which is not permissible. The Petition stands rejected and dismissed.

Summary

Issues involved:
1. Application under Order VI Rule 17 seeking amendments in the Writ Petition.
2. Challenge to the proviso of Section 174(2)(c) of the Central Goods and Services Tax Act, 2017 and Notification No.21/2017-C.E.
3. Interpretation of promissory estoppel and legitimate expectation.
4. Consideration of proposed amendments and objections raised by Respondents.
5. Application of Order VI Rule 17 of the Code of Civil Procedure.
6. Impact of subsequent notifications on vested rights.
7. Discretionary power of the Court to allow amendments in pleadings.
8. Determining the real question in controversy between the parties.

Analysis:
1. The Petitioner filed an application seeking amendments in the Writ Petition under Order VI Rule 17 and Section 151 of the CPC. The proposed amendments aimed to challenge the proviso of Section 174(2)(c) of the CGST Act and Notification No.21/2017-C.E., alleging a denial of vested rights and benefits promised. The amendments sought to introduce new paragraphs and clauses to strengthen the Petitioner's case.

2. The proposed amendments questioned the legality of the proviso and notification, citing violation of Article 14 of the Constitution and the Petitioner's vested rights. The Petitioner invoked principles of promissory estoppel and legitimate expectation to support their claims. The Respondents objected to the amendments, arguing that subsequent notifications did not affect vested rights conferred earlier.

3. The Court deliberated on the nature and impact of the proposed amendments. It considered the prayers in the Writ Petition, which focused on refund claims under the budgetary support scheme. The Court analyzed the necessity of the amendments for determining the real controversy between the parties and assessed the timing of the application in relation to the stage of the proceedings.

4. The Court examined the discretionary power under Order VI Rule 17 of the CPC to allow pleadings amendments. It noted the significance of raising relevant issues before the commencement of the trial and evaluated whether the proposed amendments would alter the fundamental nature and cause of action of the Writ Petition.

5. In light of the arguments presented and the impact of subsequent notifications on vested rights, the Court concluded that the proposed amendments would significantly change the essence of the case. Therefore, the Court decided not to exercise its discretion in favor of the Petitioner, leading to the rejection and dismissal of the Petition.

6. The judgment highlighted the importance of maintaining the integrity of the original cause of action and the necessity of raising pertinent issues in a timely manner. It emphasized the need for amendments to align with the core questions in dispute between the parties to ensure a fair and just adjudication.