Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Central Goods and Services Tax Act 2017 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Central Goods and Services Tax Act, 2017 (12 of 2017) |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13 Referred Case 14 Referred Case 15 Referred Case 16 Referred Case 17 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Disposed Off |
Headnote | Central Goods and Services Tax Act, 2017 – ss. 54(3) and s.164 – Central Goods and Services Tax Rules, 2017 – r.89(5) – Writ petitions were filed in the High Court of Gujarat and High Court of Madras, challenging the validity of r.89(5) on the ground that it is ultra vires s.54(3) – The High Court of Gujarat in VKC Footsteps India Pvt. Ltd. v. Union of India (R/Special Civil Application No.2792 of 2019) having examined the provisions of s.54(3) and r.89(5) held that latter was ultra vires – However, the Madras High Court in Tvl. Transtonnelstroy Afcons Joint Venture v. Union of India (Writ Petition Nos. 8596-97, 8602 etc. of 2019) came to a contrary conclusion – On appeal, held: Clause (ii) of the first proviso to s.54(3) is not merely a condition of eligibility for availing of a refund but a substantive restriction under which a refund of un-utilized ITC can be availed of only when the accumulation is relatable to an inverted duty structure, namely the tax on input goods being higher than the rate of tax on output supplies – Therefore, there is no disharmony between r.89(5) on one hand and s.54(3) particularly clause (ii) of its first proviso on the other hand – The decision passed by the Madras High Court is affirmed. Central Goods and Services Tax Act, 2017 – s.54(3) – Central Goods and Services Tax Rules, 2017 – r.89(5) – Claim of refund – Constitutional right or not – Held: Refund is a matter of a statutory prescription – Parliament was within its legislative authority in determining whether refunds should be allowed of un-utilised ITC tracing its origin both to input goods and input services or, as it has legislated, input goods alone – By its clear stipulation that a refund would be admissible only where the un-utilised ITC has accumulated on account of the rate of tax on inputs being higher than the rate of tax on output supplies, Parliament has confined the refund – While recognising an entitlement to refund, it is open to the legislature to define the circumstances in which a refund can be claimed – The proviso to s.54(3) is not a condition of eligibility but a restriction which must govern the grant of refund u/s. 54(3). Central Goods and Services Tax Rules, 2017 – r.89(5) – Validity of formula prescribed in r.89(5) – Held: The formula is not ambiguous in nature or unworkable, nor it is opposed to the intent of the legislature in granting limited refund on accumulation of un-utilized ITC – It is merely the case that the practical effect of the formula might result in certain inequities – Given the anomalies pointed out by the assesses, GST Council to reconsider the formula and take policy decision regarding the same. |
Judge | Hon'ble Dr. Justice D.Y. Chandrachud |
Neutral Citation | 2021 INSC 469 |
Petitioner | Union Of India & Ors. |
Respondent | Vkc Footsteps India Pvt Ltd. |
SCR | [2021] 15 S.C.R. 169 |
Judgement Date | 2021-09-13 |
Case Number | 4810 |
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