2024 (6) TMI 835 - HC - GST

Budgetary support claimed by Bagheri Unit and not the Baga Unit - application seeking budgetary support for period from 01.07.2017 to 30.09.2017 - HELD THAT - Having regard to the fact that there appears to be non-consideration of the petitioner s plea as to its entitlement for full budgetary support for its Bagheri Unit for the 2nd quarter from 01.07.2017 to 30.09.2017, the Order-in-Original dt. 27.07.2018 of the 4th respondent as well as the order in appeal dt. 29.07.2019 of the Commissioner (Appeals), CGST, Chandigarh set aside, and the matter remitted back to the 4th respondent to decide afresh after giving a personal hearing to the petitioner. Since the 4th respondent not only did not give any personal hearing to the petitioner but he also did not assign reasons for rejecting a portion of the claim for budgetary support, and appears to have adopted certain figures without putting them to the petitioner, the Order-in-Original dt. 20.08.2018 passed by the 4th respondent is also set aside and the matter is remitted back to the 4th respondent to the extent he had rejected the claim of the petitioner for grant of budgetary support for the 3rd quarter from 01.10.2017 to 31.12.2017. Petition disposed off by way of remand.

Summary

Issues Involved:
1. Entitlement for budgetary support for the 2nd and 3rd quarters.
2. Non-consideration of specific pleas and principles of natural justice.
3. Jurisdiction of the Appellate Authority regarding the budgetary support scheme.

Summary:

Issue 1: Entitlement for budgetary support for the 2nd and 3rd quarters

The petitioner, a cement manufacturer with two units in Himachal Pradesh, sought budgetary support u/s the "Scheme of Budgetary Support" notified on 05.10.2017. The petitioner filed applications for budgetary support for the periods 01.07.2017 to 30.09.2017 and 01.10.2017 to 31.12.2017. The Deputy Commissioner, CGST, denied the claim for the 2nd quarter on the basis that there was a credit balance of Rs. 10,25,02,596/- in the credit ledger, which could have been utilized for payment of taxes. The petitioner contended that this credit balance pertained to its other unit (Baga Unit) and not the eligible Bagheri Unit. For the 3rd quarter, the Deputy Commissioner sanctioned only part of the claim without providing notice or reasons for the rejection of the remaining amount.

Issue 2: Non-consideration of specific pleas and principles of natural justice

The petitioner argued that the budgetary support scheme is applicable to eligible units and not to the GSTIN number. The petitioner pointed out that the credit balance in the electronic credit ledger was related to the non-eligible Baga Unit. The Appellate Authority dismissed the appeals without addressing the merits, citing a Circular dated 10.01.2019 which stated that the scheme is in the nature of a grant and not a refund, thus lacking jurisdiction to decide the matter. The court noted that the Deputy Commissioner failed to consider the specific pleas of the petitioner and did not provide a personal hearing, violating principles of natural justice as held in Dabur India Limited vs. Union of India & Anr. 2019 (9) TMI 1573.

Issue 3: Jurisdiction of the Appellate Authority regarding the budgetary support scheme

The Appellate Authority dismissed the appeals on the ground that there was no mechanism for appeal against the orders of the Sanctioning Authority, as the scheme is considered a grant. The court set aside the orders of the Deputy Commissioner and the Appellate Authority, remanding the matter back to the Deputy Commissioner for reconsideration after providing a personal hearing to the petitioner.

Conclusion:

The court directed the Deputy Commissioner to reconsider the claims for budgetary support for the periods 01.07.2017 to 30.09.2017 and 01.10.2017 to 31.12.2017 afresh, after giving a personal hearing to the petitioner, and to pass orders in accordance with law within three months from the date of receipt of the order. The writ petition was disposed of accordingly.