2023 (8) TMI 581 - HC - GST

Refund of ITC - inputs and input services utilized for the export - primary contention of petitioner is that the Assistant Commissioner has patently erred in passing the impugned order, inasmuch as, the Assistant Commissioner in fact has sat in appeal over the orders passed by the Additional Commissioner (Appeals) dated 11 October 2022, by which the appeal filed by the petitioner was allowed on merits - HELD THAT - It is observed that the petitioner has been pursuing the refund application in question from December 2021, when the petitioner made such application on 31 December 2021 and on such application, the entire procedure was adopted namely of issuance of a show cause notice dated 1 February 2022, its adjudication denying refund and an appeal against the same before the Appellate Authority culminated into a final order dated 11 October 2022 of the Additional Commissioner, CGST Central Excise (Appeals) having taken place, is not in dispute. When the entire fact finding exercise was subjected to the scrutiny in an appeal resulting in the appeal being allowed, then it is difficult to accept the contention as urged on behalf of the respondents that the Assistant Commissioner, who has had no authority and jurisdiction to re-visit the concluded findings of fact and the conclusions as derived by the Additional Commissioner of Appeals. The only remedy for the department and as rightly asserted in the reply affidavit filed on behalf of respondent Nos. 1, 3 and 4 if at all was to seek review. If the department was of the opinion that the order passed by the Additional Commissioner needs to be challenged, the same was required to be assailed in the appropriate proceedings as set out in paragraph 11 of the reply affidavit. Thus, from the position as taken by respondent Nos. 1, 3 and 4, certainly it was not open to the Assistant Commissioner to pass the impugned order which amounted to sitting in appeal over the order passed by the Additional Commissioner of Appeals. On this ground, the impugned order is required to be held to be passed in patent lack of jurisdiction, as also on the face of it illegal. The Assistant Commissioner could not have passed the impugned order, of the nature he has passed as he was certainly bound by the orders passed by the Additional Commissioner (Appeals), and in the absence of any stay to the orders passed by the Additional Commissioner (Appeals), grants benefit of the orders of the Additional Commissioner (Appeals) dated 11 October 2022 to the petitioner. Petition allowed.

Summary

Issues Involved:
1. Validity and legality of the impugned order dated 27.01.2023.
2. Entitlement of the petitioner to a refund of Rs. 11,69,07,326 with interest.
3. Jurisdiction of the Assistant Commissioner to revisit the findings of the Appellate Authority.

Summary:

1. Validity and legality of the impugned order dated 27.01.2023:
The petitioner challenged the impugned order dated 27.01.2023 passed by the Assistant Commissioner, which rejected the petitioner's refund claim. The petitioner argued that the Assistant Commissioner erred by revisiting the findings of the Additional Commissioner (Appeals) dated 11 October 2022, which had allowed the refund claim. The Court observed that the Assistant Commissioner had no authority to sit in appeal over the orders passed by the Additional Commissioner (Appeals) and that the impugned order was passed in patent lack of jurisdiction and was illegal.

2. Entitlement of the petitioner to a refund of Rs. 11,69,07,326 with interest:
The petitioner sought a refund of Rs. 11,69,07,326 along with appropriate interest. The Court noted that the petitioner had been pursuing the refund application since December 2021 and that the Additional Commissioner (Appeals) had allowed the refund claim after considering all relevant contentions and evidence. The Court directed the respondents to sanction the refund amount with appropriate interest in terms of Section 56 of the CGST Act, 2017.

3. Jurisdiction of the Assistant Commissioner to revisit the findings of the Appellate Authority:
The Court held that the Assistant Commissioner had no jurisdiction to revisit the concluded findings of fact and conclusions derived by the Additional Commissioner (Appeals). The Court emphasized that the only remedy for the department was to seek a review of the order passed by the Additional Commissioner (Appeals) in appropriate proceedings. The Court relied on the principles of judicial discipline laid down by the Supreme Court in Union of India Vs. Kamlakshi Finance Corporation Ltd., which mandates that revenue officers are bound by the decisions of higher appellate authorities.

Conclusion:
The petition was allowed, and the impugned order dated 27.01.2023 was quashed. The respondents were directed to sanction the refund amount of Rs. 11,69,07,326 with appropriate interest within two weeks. The petition was disposed of with no costs.