State Of U.P Vs Vivo Mobile India Private Ltd
Date: January 3, 2024
Court: Supreme Court
Bench:
Type: Special Leave to Appeal
Subject Matter
Circular Does Not Override Statutory Provisions. HC ruling upheld.
Summary
In this case, the Supreme Court of India dismissed a Special Leave Petition filed by the State of Uttar Pradesh against the Allahabad High Court’s order quashing a GST demand of Rs. 235.52 Crores imposed on Vivo Mobile India Private Limited. The case revolved around an Input Tax Credit dispute and the interpretation of the Goods and Service Tax Act, 2017. The GST Authorities raised the demand against Vivo Mobile under Section 74(9) of the GST Act, alleging an excess Input Tax Credit of Rs. 110 Crores. The Allahabad High Court held that Input Tax Credit is a substantive right under Section 16 of the GST Act, and a circular cannot override statutory provisions. The Court also interpreted a proviso to Rule 36(4) of the GST Rules, allowing a longer reconciliation period during the COVID-19 period. The High Court directed the return of the excess recovery amount to Vivo Mobile with 6% interest. The Supreme Court refused to interfere, considering the unique circumstances of the case and directed verification of any excess recovery. The dismissal of the Special Leave Petition upholds the Allahabad High Court’s decision, emphasizing the importance of statutory provisions over circulars and recognizing the legislative intent behind GST rules during the COVID-19 pandemic.
We have heard learned A.S.G. appearing for the petitioners and perused the material on record.
Having regard to the peculiar facts of this case, we are not inclined to interfere in the matter.
The reason why we are saying so is that although the scheme was between March, 2020 to August, 2020, in the instant case, the respondents had sought benefit or extension of the scheme only by one month, that is, September, 2020.
Further in paragraph ‘89’ the High Court has recorded that the respondent(s) herein would be entitled to interest at the rate of 6% per annum on the amount of excess recovery of Rs.11,00,69,010/- (Rupees Eleven Crores, Sixty Nine Thousand and ten only) from the date of the excess recovery to the date of its actual refund.
It is pointed out by learned A.S.G. that there is no excess recovery made by the Department. However, the same is subject to verification and in the event, there is any excess recovery, the direction of the High Court shall prevail.
The special leave petition is, hence, dismissed.
Pending application(s), if any, shall stand disposed of.