Karnataka High Court
M/S Nam Estates Private Limited vs Joint Commissioner on 18 April, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2024:KHC:15476
WP No. 9075 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 9075 OF 2024 (T-RES)
BETWEEN:
M/S NAM ESTATES PRIVATE LIMITED
(INCORPORATED UNDER THE
COMPANIES ACT, 2013)
NO.150, IST FLOOR,
EMBASSY POINT
INFANTRY ROAD
BENGALURU - 560 001
REPRESENTED BY ITS DIRECTOR
P.R.RAMAKRISHNAN
AGED ABOUT 72 YEARS
...PETITIONER
(BY SMT.KRISHIKA VAISHNAV, ADVOCATE FOR
SRI. A MAHESH CHOWDHARY, ADVOCATE)
AND:
Digitally signed by 1. JOINT COMMISSIONER
LEELAVATHI S R
Location: HIGH
OF COMMERCIAL TAXES (APPEALS-I)
COURT OF 2ND FLOOR, TTMC
KARNATAKA BMTC BUILDING
SHANTHI NAGAR
BENGALURU - 560 027
2. ASSISTANT COMMISSIONER
OF COMMERCIAL TAXES,
LGSTO-20, NO.19/3, 2ND FLOOR,
CUNNINGHAM ROAD,
BANGALORE - 560 052
...RESPONDENTS
(BY SRI.HEMA KUMAR, AGA)
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NC: 2024:KHC:15476
WP No. 9075 of 2024
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED
ORDER DATED 30.09.2023 IN GST AP NO.70/2021-22 VIDE ANNEXURE A
ISSUED BY THE RESPONDENT NO. 1 AS BEING ILLEGAL, ERRONEOUS,
ARBITRARY, AND BAD IN THE EYES OF LAW & ETC.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
In this petition, the petitioner seeks quashing of the
impugned order dated 30.09.2023 in GST AP No.70/2021-22
vide Annexure-A, whereby the appeal filed by the petitioner
challenging the order dated 06.09.2021 was rejected by
respondent No.1.
2. Heard learned counsel for the petitioner and learned counsel
for the respondents and perused the material on record.
3. A perusal of the material on record would indicate that
pursuant to the Agreement dated 29.05.2017 entered into between
the petitioner and its vendor by name viz., M/s. Mavin Switchgears
and Control Pvt.Ltd., the petitioner paid advance of
Rs.14,08,79,262/- to the aforesaid vendor as well as GST of
Rs.2,53,58,268/-. Subsequently, the aforesaid vendor did not
supply goods under the contract to the petitioner and the contract
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having been cancelled, the petitioner called upon the
aforesaid vendor to return/refund the entire advance amount.
Since, the vendor did not refund/repay the aforesaid amount of
Rs.14,08,79,262/- back to the petitioner, the petitioner recovered
the same by encashing the bank guarantee furnished by the
aforesaid vendor.
4. As stated supra, in addition to paying the aforesaid
sum of Rs.14,08,79,262/- towards the agreement, the petitioner
also paid an additional amount of Rs.2,53,58,268/- towards GST,
which was in turn paid by the aforesaid vendor to the respondents.
In view of the non supply of goods covered under the contract and
cancellation of the contract and recovery of the advance amount
paid by the petitioner, the petitioner became entitled to the
aforesaid GST, which was paid by the aforesaid vendor to the
respondents without there being any tax liability in this regard either
by the petitioner or its vendor.
5. A perusal of the material on record will also indicate that on
27.08.2021, respondent No.2 issued a show cause notice calling
upon the petitioner to show cause as to why the refund
application should not be rejected, pursuant to which respondent
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No.2 passed an order dated 06.09.2021 rejecting the refund
application, which was confirmed by respondent No.1/Appellate
Authority vide impugned order dated 30.09.2023, which is assailed
in the present petition.
6. A perusal of the order dated 06.09.2021 passed by
respondent No.2 rejecting refund claim of the petitioner will indicate
that the same is unreasoned, cryptic, non-speaking order without
assigning any reasons as to why the refund application was
rejected. Further the impugned order dated 30.09.2023 at
Annexure-A will indicate that despite several judgments having
been referred to and relied upon by the petitioner, respondent
No.1/Appellate Authority confirmed the order passed by respondent
No.2 on the ground that eligibility criteria under Section 54 of the
Karnataka Goods and Service Tax, 2017, have not been met by
the petitioner. In this context, it is relevant to note that respondent
No.1 has come to the conclusion that supplier/vendor was the
person ought to have issued credit note and thereafter, it was open
for the petitioner to seek refund and without doing so, the petitioner
is not entitled to seek refund of the GST. Respondent No.1 has
also come to the conclusion that it is for the vendor to file an
appropriate application before the respondents/authorities seeking
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refund and only thereafter, the grievance of the petitioner can be
addressed for the purpose of refund.
7. In my considered opinion, in the facts and
circumstances of the instant case viz., the payment of sum of
Rs.14,08,79,262/- paid by the petitioner to the vendor,
payment of Rs.2,53,58,268/- towards GST by the vendor to
respondents and refund of entire amount of Rs.14,08,79,262/-
by encashment of the bank guarantee by the petitioner and other
material on record would cumulatively indicate that there was no
GST liability either by the petitioner or his vendor were concerned
and by applying doctrine/principles of unjust enrichment and
restitution and since the aforesaid GST amount is lying with the
respondents, who are retaining the same without there being any
GST liability either by the petitioner or the vendor, I deem it just and
appropriate to set aside the order dated 06.09.2021 passed by
respondent No.2 as well as impugned order dated 30.09.2023
passed by respondent No.1/Appellate Authority and direct the
concerned respondents to refund entire GST amount of
Rs.2,53,58,268/- back to the petitioner within a stipulated time
frame. It is however made clear that the present order is passed in
a peculiar/special facts and circumstances of the instant case and
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without making it a precedent or having any precedential
value for any purpose, whatsoever.
8. In the result, I pass the following:
ORDER
(i) Petition is hereby allowed;
(ii) Order dated 06.09.2021 passed by respondent
No.2 and impugned order dated 30.09.2023
passed by respondent No.1 are hereby set-aside;
(iii) Refund application dated 05.07.2021 filed by the
petitioner stands allowed;
(iv) Concerned respondent/authority is directed to
refund the entire GST amount of Rs.2,53,58,268/-
back to the petitioner within a period of
eight weeks from the date of receipt of a copy
of this order; and
(v) It is also made clear that this order does not
interpret any of the provisions of CGST Act
and Rules and it is made in the peculiar/special
facts and circumstances obtaining in the instant case
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and this order shall not be treated as a
precedent or have any precedential value for
any purpose whatsoever.
Sd/-
JUDGE
AV
