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Gujarat HC Stays Retrospective Amendment in Case of Inverted Duty Refunds
Gujarat HC Stays Retrospective Amendment in Case of Inverted Duty Refunds
TG Team
In the context of nature of challenge vis-a-vis prayer clause 17 to hold and declare 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, our attention is invited 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 and without disputing the fact about existence of power of amending the
Rule with retrospective effect, contentions are raised based on grounds of challenge that
impugned amended Rule 89(5) denies the benefit of refund of unutilized input tax credit
and demand notice dated 21.6.2018 is illegal.
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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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Posted Under
Category : Goods and Services Tax (8431)
Type : Judiciary (12854)
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