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2024 (5) TMI 1211 - HC - GSTRecovery of Refund - misclassification of supply of solar power generating system - authority to put the petitioner to notice or take a different view - petitioner submits that once an order under Section 54 of the CGST Act is passed, it can be annulled only in a proceeding filed under Section 107 (appeal) or under Section 108 (revision) - HELD THAT - The Madras High Court considered the decision of Asian Paints (India) Limited v. Collector of Central Excise, Bombay 2002 (4) TMI 62 - SC ORDER which was approved by Supreme Court of India and came to hold ' Unless, the Annexure-I certificate is cancelled or rejected by the competent Authority, by following the procedure under Section 35E, it is not permissible for the respondents to invoke Section 11A of the Act. Therefore, we are of the considered opinion that the issuance of show cause notices is without jurisdiction and is liable to be struck down.' Till next date of hearing, no coercive action be taken against the petitioner pursuant to the Order-in-Original dated 10.01.2024. List on 22.07.2024.
Issues:
1. Refund application under Section 54(3) of CGST Act challenged for misclassification. 2. Authority's jurisdiction to issue notice post refund order questioned. 3. Petitioner seeks protection citing Rajasthan High Court order. 4. Reference to Madras High Court judgment on analogous provisions. 5. Request for protection from refund demand based on legal precedents. Analysis: The petitioner filed four refund applications under Section 54(3) of the Central Goods and Services Tax Act, 2017 (CGST Act), which were initially entertained. However, the authority later issued a notice alleging misclassification of the supply of a solar power generating system, leading to a higher GST percentage under "mixed supply." The petitioner argued that once an order under Section 54 of the CGST Act is passed, it can only be challenged through appeal or revision under Sections 107 and 108, respectively. The petitioner sought protection based on a Rajasthan High Court order addressing a similar issue (CWP. No. 4398 of 2024) and contended that the authority lacked jurisdiction to reassess the classification post-refund order. Moreover, the petitioner referenced a Madras High Court judgment involving analogous provisions of the Central Excise Act, 1944, to support their argument. The Madras High Court's decision in M/s. Eveready Industries India Ltd. v. The Customs, Excise and Service Tax Appellate Tribunal highlighted the need for harmonious interpretation of relevant sections. The court emphasized that unless a certificate is canceled or rejected following the prescribed procedure, invoking a different section is impermissible. Citing this precedent, the petitioner argued that the impugned Order-in-Original lacked legal authority and requested protection from any refund demand. In light of the arguments presented and the legal precedents cited, the court granted interim relief to the petitioner. It directed that no coercive action be taken against the petitioner pending further hearings. The court scheduled the next hearing for a later date and instructed the respondents to file their counters within the specified timeline. The petitioner's request for protection from the refund demand was considered in the context of the legal principles discussed, ensuring a fair opportunity for both parties to present their case before the court.
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