Order Date – 12 March 2024

Parties: M/s Samsung India Electronics Private Limited Vs State of UP and Others

Facts –

• The Petitioner, M/s Samsung India Electronics Private Limited, rendered IT Services to SEC Korea, the Petitioner procures various inputs, input services, and capital goods and accordingly avails ITC of the CGST, SGST, and IGST paid thereon, in accordance with the applicable provisions of the GST laws.
• The refund claim filed by the petitioner for the period April 2019 to June 2019 was sanctioned however the claim for July – December 2019 was partly rejected on the ground that the specific goods are capital goods, and not inputs vide orders dated April 28, 2021 and November 8, 2021.

Issue –

• Whether the principle of res judicata is applicable in matters of taxation?

Order –

• The Single Bench of Hon’ble High Court observed that the Department’s decision to withhold refund claims for the aforementioned periods, despite having sanctioned similar claims in the past and subsequently in the future, lacks cogent rationale.
• The Supreme Court has consistently emphasized that Revenue cannot take a different stand when facts are almost identical. These judgments underscore the significance of consistency in tax administration and the need for tax authorities to adhere to established principles and precedents. The arbitrary withholding of refund claims for specific periods, despite past precedents and the absence of any material change in circumstances, is contrary to the principles of fairness and equity.
• In the instant case, the specific goods used for R & D and software development are essential for providing IT services, and therefore, qualify as inputs under the CGST Act, 2017. It is evident in the instant case that the Department has deviated from the show cause notice, and as such any order passed by it running contrary to the grounds taken in the show cause notice, cannot be sustained.
• The Writ petition is allowed.