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SAMPLE MOOT COURT PROBLEM

By AB Tutorials
24 Apr, 2023
SAMPLE MOOT COURT PROBLEM
  • Thomas Ltd., a company established in India, manufactures a product called Bob. It has its manufacturing factories at Mumbai, Kolkata and Hyderabad and has a corporate office at Delhi registered as an ‘Input Service Distributor’.
 
  • To manufacture Bob, Thomas has to procure various inputs and input services. These inputs and input services are taxed at a high rate resulting in the accumulation of Input Tax Credit (ITC) under Section 16 of the CGST Act, 2017. A major portion of this ITC is ascribable to input services.
 
  • Thomas, thus, filed for refund claims under Section 54(3)(ii) of the CGST Act, 2017 read with Rule 89(5) of the CGST Rules, 2017 for refund of Input Tax Credit with the refunds being filed at Mumbai, Hyderabad and Kolkata. The refunds have been claimed due to a higher rate of tax on inputs than the rate of tax on output supplies for the period 01.07.2017 to 31.03.2018.
 
  • The Mumbai Commissionerate by an order dated 31.01.2018 allowed for the refund of Rs. 4 crores for the period 01.07.2017 to 31.12.2017. The claims filed at Hyderabad and Kolkata are still pending.
 
  • On 18.04.2018, Notification No. 21/2018-CT, was issued which amended Rule 89(5) of the CGST Act, 2017. Rule 89(5), as originally read, provided for refund of tax on input and input services. After the amendment by the Notification, the Rule restricted the refund of tax on inputs alone. Further, Notification No. 26/2018-CT, dated 13.06.2018, was issued which further amended Rule 89(5) and gave it a retrospective effect from 01.07.2017.
 
  • Due to these amendments in the CGST Rules, Thomas was issued an order dated 11.10.2018 under Section 73 of the CGST Act read with Maharashtra Goods and Services Tax Act, 2017 directing it to refund an amount of Rs. 2.5 crores with reference to the refund of ITC on input services. This order was, however, issued without any show cause notice to Thomas.
 
  • Aggrieved with the retrospective amendment of the CGST Rules and the consequent issue of the order dated 11.10.2018, Thomas Ltd. has filed this present Writ Petition in the Hon’ble High Court of Delhi under Article 226 of the Constitution of India.

The following questions arise:
 
  • WHETHER THE WRIT PETITION IS MAINTAINABLE UNDER BEFORE THE HIGH COURT OF DELHI.
 
  • WHETHER RULE 89(5) OF CGST RULES AS AMENDED VIDE NOTIFICATION NO. 21/2018-CT IS VALID.
 
  • WHETHER  THE  POWER  OF  THE  GOVERNMENT  TO  AMEND  RULES RETROSPECTIVELY UNDER SECTION 164(3) OF THE CGST ACT IS VALID.
 
  • WHETHER THE NOTIFICATION NO. 26/2018-CT WHICH GIVES RETROSPECTIVE EFFECT TO NOTIFICATION NO. 21/2018-CT IS VALID.
 
  • WHETHER THE ORDER FOR RECOVERY OF REFUND DATED 11.10.2018 IS VALID.
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