2023 (4) TMI 642 - HC - GST

Rejection of claim of the petitioner under Budgetary Support Scheme notified vide Notifications No.FNO 10(1)/2017- DBA-II/NER dated 05.10.2017, SRO 519 dated 21.12.2017 and SRO 521 dated 21.12.2017 - seeking issuance of Writ of Mandamus directing the respondents to allow the Budgetary support to it by calculating the same on the quantum of cash tax paid through cash ledger account on monthly basis instead of adopting the calculations on quarterly basis. HELD THAT - It is submitted that, during pendency of the writ petitions, the Financial Commissioner of Finance Department, UT of Jammu and Kashmir issued clarification vide his No. FD-ST/29/2022-03 dated 26.04.2022 with respect to determination of amount of reimbursement under SRO 519 dated 21.12.2017, SRO 521 dated 21.12.2017 and SRO 63 dated 05.02.2018. It is submitted that the aforesaid clarification came to be issued by the Financial Commissioner in view of the doubts raised with regard to the application of formula related to determination of amount of reimbursement to the eligible industrial units and also that in view of the wrong formula applied, the claims of various industrial units were being rejected erroneously. Issuance of clarification by the Finance Department, UT of Jammu and Kashmir, has necessitated revisiting of claim of the petitioner by the Adjudicating Authority. The matters remanded to respondent No.3 to reconsider the entire issue having regard to the clarification issued by the Department of Finance, UT of Jammu and Kashmir bearing No. FDST/ 29/2022-03 dated 26.04.2022 - Petition allowed by way of remand.

Summary

Issues:
Challenge to rejection of claim under Budgetary Support Scheme based on quarterly calculations.

Analysis:
The judgment involves two writ petitions challenging the rejection of the petitioner's claim under the Budgetary Support Scheme. The petitioner sought a Writ of Mandamus directing the respondents to allow the Budgetary support by calculating it based on the cash tax paid through the cash ledger account on a monthly basis, contrary to the quarterly basis adopted by the Adjudicating Authority. The rejection was deemed arbitrary and contrary to the scheme envisioned by the Government of India.

The petitioner applied for reimbursement under the Budgetary Support Scheme for specific periods but faced rejection due to unutilized Input Tax Credit at the end of the quarter. The rejection was considered illegal and arbitrary, leading to the petitioner approaching the court seeking relief. During the proceedings, a clarification was issued by the Financial Commissioner of the Finance Department, UT of Jammu and Kashmir, addressing doubts related to the formula for determining reimbursement amounts under specific notifications. This clarification highlighted errors in the application of the formula, resulting in erroneous rejections of claims by various industrial units.

The petitioner's grievance centered around the requirement for budgetary support to be calculated based on monthly cash tax payments, as clarified by the Financial Commissioner. The judgment emphasized the need for the Adjudicating Authority to reconsider the petitioner's claim in light of the clarification issued by the Finance Department. The court, after hearing both parties, concluded that the clarification necessitated a fresh review of the petitioner's claim by the Adjudicating Authority.

Consequently, the court quashed the impugned order and remanded the matters to the Adjudicating Authority for a reevaluation of the entire issue in accordance with the clarification provided by the Department of Finance, UT of Jammu and Kashmir. The directive aimed to ensure that the petitioner's claim for Budgetary Support Scheme reimbursement was appropriately assessed based on the clarified guidelines.