Supreme Court dismissed the SLP on grounds of delayed filing it

[CA Bimal Jain]

The Hon’ble Supreme Court in the case of UNION OF INDIA & ANR. VERSUS BT (INDIA) PRIVATE LIMITED - 2024 (12) TMI 609 - SC ORDER dismissed the Special Leave Petition (“SLP”) filed by the Revenue Department (“the Petitioner”) after a delay of 229 days. The SLP was against the Delhi High Court Judgment which permitted the refund of CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004 (“the CCR”) to M/s BT India (Private) Limited (“the Respondent”) and held that finalised assessment cannot be reopened in refund proceedings absent any challenge to self-assessed returns.

The Respondent had filed 3 refund applications for three quarters within the specified date i.e. September 29, 2015, December 23, 2015 and March 29, 2016 respectively. The Petitioner, after a lapse of more than 3 years, issued a deficiency memo in 2019 in respect of which the Respondent submitted the documents as and when sought for. However, without issuance of any formal Show Cause Notice (“SCN”), the refund applications of the Respondent were rejected on the following grounds:

1. documents those establish the genuineness of the GST refund claims were not submitted and
2. Assessee qualified as an intermediary.

The Respondent contended that failure of the Petitioner to challenge self-assessed returns under Section 70 of Finance Act, 1994 signifies that the assessments had reached finality while relying upon judgment of Input Tax Credit (“ITC”) claiming it to be squarely applicable in context of service tax laws as well.

However, the Hon’ble Delhi High Court allowed writ petition based on following key aspects:

1. Deficiency memo cannot be issued after 15 days of refund application,
2. Deficiency memo is not a SCN,
3. If self-assessment of exports is not challenged, refund of ITC cannot be denied,
4. If refunds granted in past have not been challenged on principle of consistency, refund cannot be denied,
5. Principles of natural justice are violated and refund denial was without jurisdiction
6. Lastly, relied on the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV - 2019 (9) TMI 802 - SUPREME COURT (LB) wherein it was held that the proceedings are merely executionary in nature.

Before the Hon’ble Supreme Court, the Respondent argued that Hon’ble Delhi High Court rightly after examining the aspects of Customs Act and Finance Act, applied the ratio of ITC and allowed the writ petition. Further, it pleaded that delay in filing the SLP has not been explained justifiably by the Petitioner. Hence, the Hon’ble Supreme Court agreed that no substantial question of law arises and dismissed SLP on merits.

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