In a recent ruling, the Orissa High Court dismissed a petition by Vedanta Ltd to read down the Rule 89(4) of the GST rules and held that the provision is intravires.
A petition was filed by the assessee, M/s Vedanta Ltd, challenging the propriety of Orders of the GST department returning the applications filed manually claiming supplementary refund of unutilized input tax credit pertaining to Compensatory Cess on inputs used in relation to zero-rated supplies made during the relevant period.
A bench comprising Chief Justice Dr. S. Muralidhar and Justice Murahari Sri Raman relied on the recent decision of the Supreme Court wherein the Apex Court declined to substitute its wisdom for that of the subordinate legislation prescribed under Rule 89(5) in the context of refund on account of inverted duty structure.
Relying on the decision the High Court held that “this Court does not consider it expedient to go beyond what is stated in Union of India Vrs. VKC Footsteps India Pvt. Ltd., for the purpose of ascertaining quantum of refund in case of zerorated supplies as prescribed under Rule 89(4) of the GST Rules.”
Dismissing the petition, the Court held that “Rule 89(4) of the Central Goods and Services Tax Rules, 2017/the Odisha Goods and Services Tax Rules, 2017 is intra vires and said rule being framed in conformity with the powers conferred on the Government under Section 164 of the Central Goods and Services Tax Act, 2017/the Odisha Goods and Services Tax Act, 2017, there is no necessity to read down Rule 89(4) as suggested by the petitioner-company.”
“Having claimed refund of unutilized input tax credit on account of zero-rated supplies by clubbing up all the transactions relating to three units, namely, 2 MTPA Aluminium Refinery and Captive Power Plant at Lanjigarh; Jharsuguda 1215 MW Captive Power Plant; and Jharsuguda 2400 MW Thermal Power Plant, situated in Domestic Tariff Area bearing single/common GSTIN: 21AACCS7101B1Z8 granted in terms of Section 25, there is no scope for the petitioner-company to insist on consideration of supplementary refund application based on fresh calculation made by taking into account transactions of individual unitwise,” the Court said.
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