CASE TITLE – Glenmark Pharmaceuticals Limited v. Union of India
CASE NUMBER – W.P. ( C ) No. 2 of 2023
DATED ON – 06.05.2024
QUORUM – Hon’ble Justice Bhaskar Raj Pradhan
FACTS OF THE CASE
The writ petition does neither challenge the Budgetary Support Scheme and specifically the mandate of paragraph 5.4 thereof nor the two circulars i.e. circular dated 27.11.2017 and Circular dated 10.01.2019 issued by the Central Board of Excise and Customs. it is contended that Respondent No.3 has rejected the claim for budgetary support in contravention of the Budgetary Support Scheme and the two circulars. Paragraph 5.4 of the Budgetary Support Scheme provided that the budgetary support shall be worked out on quarterly basis for which claims shall be filed on a quarterly basis namely for January to March, April to June, July to September and October to December. When the petitioner made the claims for the four quarters as above, four Orders dated 05.12.2019 were passed rejecting all the claims of the petitioner on the ground that claims made for the period prior to the issuance of unique ID (UID) is not maintainable. This was challenged by the petitioner in Writ Petition (C) No. 48 of 2020 Glenmark Pharmaceuticals Ltd. vs. Union of India & Ors. The Division Bench of the High Court of Sikkim vide Judgment dated 24.11.2021 set aside those Orders with the direction to the authorities to process the four claims made by the petitioner for budgetary support and sanction reimbursements as found eligible within three months from the date of the judgment. Pursuant thereto the respondent no.3 vide three orders, all dated 01.03.2022 sanctioned various amounts as budgetary support for three quarters i.e. October, 2017 to December, 2017, January 2018 to March, 2018, April 2018 to June, 2018. The respondent no.3 vide Order No.307/BS/GST/GTK-DIV/2021-22 dated 01.03.2022 (impugned order) informed the petitioner that he had sanctioned Rs.0/-(Rupees zero) only to the petitioner as budgetary support for goods cleared by the petitioner during the quarter – July 2017 to September, 2017
ISSUE
Whether the budgetary support claimed by the petitioner for the month of July 2017 and August 2017 separately in their initial applications ought to have been favourably considered by the Assistant Commissioner, Central Goods & Service Tax.
CONTENTIONS BY THE PETITIONER
The learned counsel for the petitioner contended that the petitioner had satisfied all the conditions of the Budgetary Support Scheme but was denied on its erroneous interpretation and of the Circular dated 27.11.2017 and Circular dated 10.01.2019 issued by the Central Board of Excise and Customs. Attention was drawn to paragraph 5.1 and 5.6 of the Budgetary Support Scheme. The petitioner claimed budgetary support for the month of July 2017 and August 2017 but did not claim for the month of September 2017 since no IGST was paid in cash for that month. It was the petitioner’s argument that the separate claims for the months of July 2017 and August 2017 was in terms of Circular dated 10.01.2019. The petitioner argued that reliance placed on Circular dated 27.11.2017 is misplaced and incorrect. It was also stated that Circular dated 27.11.2017 allows adjusting the balance of ITC against IGST paid in cash but does not allow aggregation of figures for the entire quarter. It was submitted that reliance placed on format and formula of the Circular dated 27.11.2017 is incorrect and cannot supersede the Budgetary Support Scheme. Relying upon the judgment of the Supreme Court in Commissioner of Central Excise, Bolpur vs. Ratan Melting and Wire Industries it was submitted that any circular which is contrary to the statutory provisions has no existence in law.
CONTENTIONS BY THE RESPONDENT
The learned Deputy Solicitor General of India appearing for the respondents drew the attention of the Court to paragraphs 3.2, 5.1, 5.4 of the Budgetary Support Scheme as well as paragraph 9(ii) of the Circular dated 27.11.2017 and submitted that a combined reading of these provisions requires that as per the formula, whatever balance of ITC of CGST/IGST is available at the end of quarter, the same is to be deducted from the cash payment for calculation of budgetary support claim for the quarter. They had also pointed out that the petitioner did not challenge the Circulars dated 27.11.2017 and 10.01.2019. It was their submission that the budgetary support under the Budgetary Support Scheme is in the nature of grant and not refund of duty under taxation law
COURT ANALYSIS AND JUDGEMENT
The Hon’ble High Court of Sikkim stated that it was incumbent upon the petitioner to satisfy the requirements of the Budgetary Support Scheme and follow the procedure prescribed. When a procedure is prescribed, the petitioner while seeking the grant of budgetary support, is required to follow that procedure and not work out a different procedure for the authorities to follow, the fact that budgetary support was given to the petitioner for the other three quarters, it was evident that there was no malice on the part of the authorities while rejecting the claim for budgetary support for the quarter July 2017 to September 2017. And they also noted that the petitioner makes no grievance about the applications filed by them for the other quarters for which budgetary support as sought for, were granted. In the writ petition what has been stated is that the applications were filed on the oral direction of the authorities to resubmit the applications. The petitioner has not indicated that the application provided incorrect information or that it was involuntary, but during the arguments, they stated that the application was filed on the persistence of the authorities and not voluntarily. The application was however, filed by the respondents in their counter affidavit. The Hon’ble High Court noticed that, although the petitioner had made an attempt to underplay this application by suggesting that the earlier applications filed by the petitioner were the correct applications it was quite clear that what the petitioner intended to do was to make the authorities to work out the budgetary support on the basis of the monthly claims filed by them earlier and not as per the quarter as required under the Budgetary Support Scheme. The petitioner made separate applications for July 2017 and August 2017 without including the balance of ITC of CGST for the month of September 2017 they could attain positive budgetary support for each of the months separately and claim it. The petitioner did not make any claim for September 2017 in which the balance of ITC of CGST was Rs. 12,59,63,822/- (Rupees Twelve Crores Fifty Nine Lakhs Sixty Three Thousand Eight Hundred Twenty Two) as they would not be entitled to any budgetary support because of the balance of ITC of CGST for the month of September 2017. Therefore, when the petitioner was required by the authorities to modify their initial applications to a quarterly basis as required under the law they had no choice but to reflect the balance of ITC of CGST for the month of September 2017 as well. This led the petitioner to calculate their own budgetary support in the negative correctly as done in the application mentioned by the petitioner in the writ petition but filed by the respondent in the counter affidavit. Due to these facts, The Hon’ble High Court of Sikkim was of the view that the petitioner is not entitled to any relief as sought for in the present writ petition and was accordingly dismissed.
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Judgement Reviewed by – Gnaneswarran Beemarao
