Orissa HC holds Rule 89(4) of GST Rules as “Intra Vires”

The Petitioner had filed a refund application of the unutilized ITC in respect of zero-rated supplies made by all its units together. The said refund was allowed by the Department, however the Petitioner on computing the unit-wise quantum of refund, it was observed that the amount of refund granted by combining all of the units together was considerably less. Therefore, the Petitioner manually applied for a supplementary refund by computing the claim on the basis of supplies made unit-wise, however, the department rejected the supplementary refund. Aggrieved the Petitioner preferred a Writ before the Orissa HC. 

The HC emphasised that all units of the company having same GSTIN has to be treated as one individual for the purpose of making claims under the GST Act.  Further as the Petitioner had availed the benefits of refund by combining the three units, subsequent thereto, it could not turn around and ask for more refund by filing further application for supplementary refund by computing amount of refund taking into account transactions of individual unit.  Accordingly, the HC held that, there is no scope for consideration of a supplementary refund application based on a fresh calculation made by taking individual unit-wise transactions into account. The bench also declined to read down Rule 89(4) of the CGST Rules, 2017 as it was framed in conformity with the powers conferred on the government u/s 164 of the CGST Act and thus held it as “intra vires”.

Vedanta Limited vs. UOI [TS-01-HC(ORI)-2023-GST]

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