The Gujarat High Court has granted an interim stay of a demand notice wherein the petitioner challenged the retrospective amendment in the Goods and Services Tax (GST) laws where a change was brought in refund provision, denying the benefit of refund of unutilized input tax credit.
The petitioners, Shree Rama Newsprint Limited has approached the Court seeking a declaration that Rule 89(5) of the Central Goods and Services Tax Rules, 2017 as amended vide Notification No. 21/2018-Central Tax dated 18.4.2018 and Notification No.26/2018-Central Tax dated 13.6.2018 to the extent that the said provision denies grant of refund of unutilized tax credit in respect of tax paid on input services is ultra vires to the Constitution of India and provisions of the Central and Service Tax Act, 2017.
Senior Advocate Mihir Joshi and Advocate Ms Amrita M Thakore, appeared for the petitioner drawn the attention of the Court to Sections 53, 54 of Chapter XI pertaining to “Refund” of the Act, 2017 and specifically sub-section (3) (ii) along with un-numbered proviso of the very section in juxtaposition to definition of “input”, “input services”, “input tax”, “input tax credit” respectively under Sections 2 (59) (60) (62) and (63) of the Act and Rule 89 about application for refund of tax, interest, penalty, fees or any other amount so existed which came to be later on amended vide notification No.21/2108 dated 18.4.2018 and notification No.26/2018 dated 13.6.2018.
The petitioners contended that the impugned amended Rule 89(5) denies the benefit of refund of unutilized input tax credit and demand notice dated 21.6.2018 is illegal.
A bench comprising Justices Anant S Dave and Biren Vaishnav observed that “Considering the above, prima facie, we are inclined to issue Notice returnable on 10.10.2018. Meanwhile there shall be ad-interim relief as prayed for in para 17(D) meaning thereby the impugned demand notice dated 21.6.2018 and its operation and implementation is stayed hereby.”
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