Bombay HC in the case of BA Continuum India Pvt. Ltd. Versus Union of India

Case Covered:

BA Continuum India Pvt. Ltd.

Versus

Union of India

Facts of the Case:

In this petition filed under Articles 226 / 227 of the Constitution of India, the petitioner has assailed legality and correctness of five identical orders all dated 26.06.2020 passed by respondent No.4 for five quarters covering the period from April 2018 to June 2019 rejecting the refund claims made by the petitioner in respect of unutilized input tax credit.

Petitioner is a company incorporated under the Companies Act, 1956. It is engaged in the business of providing information technology and information technology-enabled services to customers located outside India. It has its registered office at Andheri (East), Mumbai.

Under the erstwhile service tax regime, the petitioner was registered with the service tax department. With effect from 01.07.2017, the goods and services tax (GST) regime came into effect with the introduction of the Central Goods and Services Tax Act, 2017 and the corresponding Maharashtra Goods and Services Tax Act, 2017 in so far State of Maharashtra is concerned. The erstwhile Central Excise Act, 1944 and Chapter V of the Finance Act, 1994 dealing with service tax stood subsumed in the Central Goods and Services Tax Act, 2017. All the assessees under the erstwhile two enactments dealing with central excise and service tax were required to migrate to the GST regime in terms of section 139(1) of the Central Goods and Services Tax Act, 2017 (briefly ‘the CGST Act’ hereinafter).

Observations:

At the outset, we may mention that this Court under Article 226 of the Constitution of India is confining its scrutiny to the decision-making process culminating in the passing of the impugned orders dated 26.06.2020. In exercise of the power of judicial review, the merit of the decision per se is not being examined. It is the decision making process with which judicial review is concerned. Therefore, we are consciously not entering into the arena of merit of the petitioner’s claim to refund at this stage.

We have already noticed that the petitioner had filed five applications for a refund covering five periods from April 2018 to June 2019 in the prescribed format on 27.12.2019, 21.01.2020, 27.01.2020, 17.02.2020, and 19.02.2020. Respondent No.4 issued show-cause notices thereafter to the petitioner on 26.02.2020 in respect of three claims and on 09.03.2020 in respect of the remaining two claims. Those were in fact notices for rejection of application for refund. We may take one such show cause notice which is dated 09.03.2020 for the period from January 2019 to March 2019. While giving reasons as to why the petitioner is not eligible to get the refund, the petitioner was granted 15 days’ time to file a reply and was also directed to appear before respondent No.4.

We also find that a large number of e-mails exchanged between the parties have been placed on record. In one of the e-mails dated 21.04.2020, respondent No.4 had informed the petitioner that she was unable to see the reply of the petitioner in the electronic format till 18.04.2020 due to a log-in error. Referring to the request of the petitioner for an opportunity to be heard, it was mentioned that due to lock-down conditions and restrictions, it would not be possible to give an opportunity for a personal hearing. Petitioner was called upon to submit details via e-mail which would be treated as an opportunity of hearing. In this connection, reliance was placed on the Trade Circular dated 17.03.2020.

The Decision of the Court:

In the light of what we have discussed above, we set aside the impugned orders dated 26.06.2020. Applications of the petitioner for remand shall now be considered afresh by another proper officer to be allotted by respondent No.3. Let the applications for refund be heard by the new officer within a period of three months from the date of receipt of a copy of this order by respondent No.3 after giving an opportunity of being heard to the petitioner. All contentions are kept open.

Writ petition is accordingly allowed to the extent indicated above. However, there shall be no order as to cost.

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