Glenmark To Follow Prescribed Procedure For Claiming Budgetary Support And Not Different One For Authorities To Follow: Sikkim High Court

The Sikkim High Court has held that 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 bench of Justice Bhaskar Raj Pradhan has observed that 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 the ITC of CGST for the month of September 2017 as well.

The petitioner/assessee has challenged the rejection of the claim for budgetary support for the period July–September 2017 even though its claim for October 2017–June 2018 was allowed under the “Scheme of Budgetary Support under Goods and Services Tax Regime” to the units located in the States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh, and the North East, including Sikkim, dated October 5, 2017 (the Budgetary Support Scheme).

The issue raised was whether the budgetary support claimed by the petitioner for the months of July 2017 and August 2017 separately in their initial applications ought to have been favorably considered by the Assistant Commissioner, Central Goods & Service Tax, although as per the respondent department, the Budgetary Support Scheme envisaged working it out on a quarterly basis on claims to be filed on a quarterly basis.

The petitioner contended that there was a violation of principles of natural justice as the same has been passed without granting any opportunity of personal hearing to the petitioner. The Budgetary Support Scheme provides the manner in which the claims can be made and determined. The initial orders of rejection passed by the respondent had been set aside by the Court, and thereafter, the claims of the petitioner were re-examined. Pursuant thereto, out of the four claims made by the petitioner for four quarters, three were accepted and budgetary support granted. The petitioner has no grievance against the non-grant of opportunity of hearing for those quarters for which their claims were accepted and budgetary support granted. In spite of the petitioner having not fulfilled the requirement of the Budgetary Support Scheme to make their claims for the quarter, an opportunity was granted to them to resubmit their applications for budgetary support.

The department contended that as per paragraphs 3.2, 5.1, and 5.4 of the Budgetary Support Scheme as well as paragraph 9(ii) of the Circular dated November 27, 2017, the formula states that whatever balance of ITC of CGST or IGST is available at the end of the quarter, the same is to be deducted from the cash payment for the calculation of the budgetary support claim for the quarter. It is pointed out that the petitioner has not challenged the Circular dated November 27, 2017 and the Circular dated January 10, 2019.

The court noted that as the petitioner made separate applications for July 2017 and August 2017 without including the balance of the 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/-, as they would not be entitled to any budgetary support because of the balance of ITC of CGST for the month of September 2017. However, what was required to be done by the petitioner was to make the claim for the quarter from July 2017 to September 2017. The Budgetary Support Scheme had envisaged the grant of budgetary support to be worked out quarterly on a claim made for the quarter and not for separate months.

The court held that the petitioner is not entitled to any relief as sought in the writ petition.

Counsel For Petitioner: Rahul Tangri

Counsel For Respondent: Sangita Pradhan

Case Title: Glenmark Pharmaceuticals Limited Versus Union of India

Citation: 2024 LiveLaw (Sik)1

Case No.: W.P. (C) No. 02 of 2023

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