A Division Bench of the Jammu & Kashmir and Ladakh High Court has recently dismissed the Goods and Services Tax ( GST ) exemption claim of Godrej Consumer Products Limited as the notification withdrawing exemption of GST was a policy matter and not a vested right available to the assessee.
Respondent-state, by writ of mandamus, to be directed to formulate an appellate procedure for rejection of funds or against erroneous demands in the absence of the Second appellate authority on GST matters, the GST Appellate Tribunal that is yet to be established.
The petitioner was stated to have commenced commercial production out of the Coil-11 unit in the year 2005-06 and was availing the central excise exemption benefits under the Notification no.56/2002-Central Excise dated 14th November 2002 and that the benefit would continue for ten years from the date of publication of the Notification or commencement of the commercial productions in the new units.
Pranav Kohli with Vineet Nagla and Arun Dev Singh appearing for the petitioner also contended that, pursuant to New Industrial Policy and other concessions for Jammu and Kashmir, which were initially introduced on 14th June 2002, respondent no.2 introduced Notification no.1/2010-Central Excise dated 6th February 2010 (Excise Exemption Notification) to enable manufacturers to set up new units/undertake substantial expansion at a later date from availing the central excise benefit.
The withdrawal of the budgetary support scheme with effect from 1st July, 2017 was also challenged by the petitioners.
In short, it was submitted that the duty and tax exemptions as applicable in the extant regime prior to implementation of Goods and Services Tax (GST) were to be made available in the GST regime also as there was no sunset clause included in the exemption notifications.
It was contended by respondents that the petitioner-unit was not availing the benefit of any exemption notifications issued by the Government of India.
It was clarified that the withdrawal of exemption is a policy matter and the courts of law are not to intervene unless there is any express violation of Constitutional provisions.
Observing that the withdrawal of exemptions was in public interest, the bench of Justices Mohan Lal and Tashi Rabstan held that, the assessee-petitioner, Godrej Consumer Products Limited is not entitled to GST exemptions as contended and thereby dismissed the Writ petitions.
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