2024 (9) TMI 1459 - HC - GST

Refund order - rejection on the ground that the petitioner as an SEZ Unit was not allowed to claim refund under the GST law and the refund claim for the tax period on supplies made to SEZ Unit / Developers can be claimed only by the supplier of goods or services - HELD THAT - Admittedly, no stay has been granted by the Hon ble Apex Court in the S.L.P. preferred by the Revenue against the aforesaid decision in the case of Britannia Industries Limited 2020 (9) TMI 294 - GUJARAT HIGH COURT . The ratio laid down by the Division Bench of this Court in the case of Britannia Industries Limited still holds the field and thereby, the same ought to have been followed by the Appellate Authority while deciding the appeal of the Revenue. The Appellate Authority could not have ignored the dictum of law merely on the ground that the said decision is pending adjudication before the higher forum more particularly without any stay. The facts of the present case as well as the facts in the case of Britannia Industries Limited are more or less identical in nature and thereby, a different view than that of already taken by the Coordinate Bench of this Court in the case of Britannia Industries Limited cannot be takien. The present petition is allowed by quashing and setting aside the impugned order dated 30th November 2023 passed by the respondent No. 2 - Appellate Authority. The present petition is, accordingly, disposed of.

Summary

Issues:
Challenge to refund order, entitlement of SEZ Unit for refund of unutilized ITC, applicability of Rule 89 of CGST Rules, interpretation of SEZ Act and related notifications, appeal against refund order, consideration of previous judgments, stay on judgment pending S.L.P.

Analysis:
The petitioner, a company engaged in manufacturing chemical products in a Special Economic Zone (SEZ), filed a petition seeking writs to prohibit respondents from acting on an appeal order dated 30.11.2023 and to quash the same. The petitioner exports goods without tax payment but complies with GST procedures. The petitioner claimed a refund under Rule 89 (4) for accumulated ITC of Rs. 65,05,135 for May 2021 to March 2022. The Assistant Commissioner sanctioned the refund, but an appeal was filed by the Revenue against it, arguing SEZ Units cannot claim refunds. The Appellate Authority set aside the refund order.

The petitioner argued that the issue of SEZ Unit entitlement for refund is settled by a previous judgment by the Coordinate Bench. The petitioner contended that since there was no stay on the previous judgment, the Appellate Authority should have upheld the refund order. The Revenue did not dispute the previous judgment or the absence of a stay order on it. The High Court noted the previous judgment's observations on Rule 89 and the entitlement of SEZ Units for refunds due to input service distributors.

The High Court found that the issue was no longer open for debate due to the previous judgment's clarity on SEZ Unit refund entitlement. As there was no stay on the previous judgment, the Appellate Authority should have followed it. The High Court allowed the petition, quashing the Appellate Authority's order and disposing of the case. The judgment emphasized the importance of following established legal principles in similar cases.

In conclusion, the High Court's decision was based on the interpretation of Rule 89 of the CGST Rules and the entitlement of SEZ Units for refunds as clarified in a previous judgment. The judgment highlighted the significance of legal precedents and the lack of a stay order on the previous decision. The ruling reiterated the importance of consistency in applying legal principles across similar cases.