In a significant case, the Sikkim High Court has directed Glenmark to follow the procedure prescribed under the Central Excise Act for claiming budgetary support. The court held that the petitioner is not entitled to any relief as sought in the writ petition.
Delta Corp Limited & Anr, the petitioner/assessee has challenged the rejection of the claim for budgetary support for the period July–September 2017 even though its claim for October 2017–June 2018 was allowed under the “Scheme of Budgetary Support under Goods and Services Tax Regime” to the units located in the States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh, and the North East, including Sikkim, dated October 5, 2017 (the Budgetary Support Scheme).
The question before thar court was whether the budgetary support claimed by the petitioner for the months of July 2017 and August 2017 separately in their initial applications ought to have been favourably considered by the Assistant Commissioner, Central Goods & Service Tax, although as per the respondent department, the Budgetary Support Scheme envisaged working it out on a quarterly basis on claims to be filed on a quarterly basis.
The petitioner contended that there was a violation of principles of natural justice as the same has been passed without granting any opportunity of personal hearing to the petitioner. The Budgetary Support Scheme provides how the claims can be made and determined. The initial orders of rejection passed by the respondent had been set aside by the Court, and thereafter, the claims of the petitioner were re-examined. Pursuant thereto, out of the four claims made by the petitioner for four quarters, three were accepted and budgetary support granted.
The department contended that as per the Budgetary Support Scheme of the Circular dated November 27, 2017, the formula stated that whatever balance of ITC of CGST or IGST is available at the end of the quarter, the same is to be deducted from the cash payment for the calculation of the budgetary support claim for the quarter. It was pointed out that the petitioner has not challenged the Circular dated November 27, 2017 and the Circular dated January 10, 2019.
The court noted that as the petitioner made separate applications for July 2017 and August 2017 without including the balance of the ITC of CGST for the month of September 2017, they could attain positive budgetary support for each of the months separately and claim it. The petitioner did not make any claim for September 2017, in which the balance of ITC of CGST was Rs. 12,59,63,822/-, as they would not be entitled to any budgetary support because of the balance of ITC of CGST for the month of September 2017.
The single bench of Justice Bhaskar Raj Pradhan has observed that when the petitioner was required by the authorities to modify their initial applications to a quarterly basis as required under the law, they had no choice but to reflect the balance of the ITC of CGST for the month of September 2017 as well. The court held that the petitioner is not entitled to any relief as sought in the writ petition.
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