Case Details: Union of India vs. SICPA India Pvt. Ltd. (2025) 34 Centax 200 (Sikkim)
Judiciary and Counsel Details
- Biswanath Somadder, CJ. & Bhaskar Raj Pradhan, J.
- Ms Sangita Pradhan, Deputy Solicitor General of India with Ms Natasha Pradhan & Ms Sittal Balmiki, Advs., for the Appellant
- S/Shri Ankit Kanodia & Passang Tshering Bhutia, Advs., for the Respondent
Facts of the Case
The assessee, a company seeking to close its business, filed an application claiming refund of unutilized ITC lying in its electronic credit ledger upon closure of the unit. The Assistant Commissioner and the Appellate Authority rejected the refund application. The assessee then approached the High Court through a writ petition, and the Single Judge allowed the petition, holding that there was no express prohibition in Section 49(6) read with Sections 54 and 54(3) of the CGST Act for claiming a refund on closure of the unit. The Department of Revenue challenged this order and the matter was accordingly placed before High Court.
High Court Held
The High Court held that, following the Supreme Court’s ruling in Union of India v. VKC Footsteps India (P.) Ltd. [2021 (52) G.S.T.L. 513 (S.C.)], an application for refund under Section 49(6) must be processed strictly as contemplated under Section 54 of the CGST Act. The Court observed that the first proviso to sub-section (3) of Section 54 provides only two specific situations in which a refund may be granted, and the assessee’s claim did not fall within either clause. It further noted that the claim was neither for zero-rated supplies made without payment of tax nor for cases where input tax on inputs exceeded the rate on output supplies, and therefore Section 54(3) restricts refunds on account of business closure. The High Court concluded that rejection of the refund application was lawful, there was no violation of any constitutional or statutory right, and allowed the Department’s appeal.
List Of Cases Reviewed
- SICPA India Pvt. Ltd. v. Union of India — (2025) 31 Centax 268 (Sikkim) — Reversed [Paras 3, 4, 8, 9, 16]
List Of Cases Cited
- Union of India v. VKC Footsteps India (P.) Ltd. — 2021 (52) G.S.T.L. 513 (S.C.) — Followed [Paras 2, 3, 8(i), 12, 12(i), 13, 14, 15, 16]
- Commissioner of Sales Tax v. Modi Sugar Mills Ltd. — (1961) 12 STC 182 (SC) — Referred [Para 11]
- Gauri Plasticulture P. Ltd. v. Commissioner — 2019 (30) G.S.T.L. 224 (Bom.) — Referred [Paras 9(iii), 17]
- Union of India v. Slovak India Trading Co. (P.) Ltd. — 2008 (223) E.L.T. A170 (S.C.) — Referred [Paras 9(ii), 9(iii)]
- Airports Authority of India v. Pradip Kumar Banerjee — (2025) 4 SCC 111 — Referred [Paras 3, 19]
- Commissioner v. Jain Vanguard Polybutlene Ltd. — 2010 (256) E.L.T. 523 (Bom.) — Referred [Para 9(ii)]
- Commissioner v. Jain Vanguard Polybutlene Ltd. – 2015 (326) E.L.T. A86 (S.C.) — Referred [Paras 9(ii), 17]
- Sterlite Power Transmission Ltd. v. Additional Commissioner — 2025 (96) G.S.T.L. 88 (Tripura) = (2025) 26 Centax 207 (Tripura) — Referred [Paras 2, 3]
- Union of India v. Ind-Swift Laboratories Ltd. — 2012 (25) S.T.R. 184 (SC) — Referred [Para 11]
- Union of India v. Slovak India Trading Co. (P.) Ltd. — 2006 (201) E.L.T. 559 (Kar.) — Referred [Paras 8, 8(i), 9, 9(i), 9(ii), 9(iii), 17
