GST Classification Dispute on Inter vs Intra-State Supply Relegated to Tribunal

Case Title: M/s Skylark Infra Engineering Pvt. Ltd. vs Union of India & Ors.
Court: High Court of Judicature for Rajasthan, Jaipur Bench
Petition Numbers: D.B. Civil Writ Petition Nos. 60/2023, 392/2023 & 393/2023
Relevant Sections: Section 19(1) of the IGST Act, Section 77(1) of the CGST Act and RGST Act, 2017
Category: Classification (Inter-State vs Intra-State Supply), Refund, Appeal Procedure
Judgement Date: 05.11.2024
Coram: Hon’ble Mr. Justice Avneesh Jhingan and Hon’ble Mr. Justice Uma Shanker Vyas

Facts of the Case:

[Para 2–4]

• The petitioner, M/s Skylark Infra Engineering Pvt. Ltd., had filed appeals challenging the classification of its supplies as intra-State instead of inter-State.

• The petitioner had already deposited IGST on these supplies.

• The Appellate Authority rejected the petitioner’s appeal, and the petitioner sought quashing of this order.

Questions in Consideration:

[Para 4, 7, 8]

1. Whether the supplies were rightly classified as inter-State or intra-State?

2. Whether the petitioner, having deposited IGST, is required to pay CGST and SGST again?

3. Whether the challenge to the constitutional validity of Section 19(1) of the IGST Act and Section 77(1) of the CGST Act is maintainable without factual findings?

4. Whether the pre-deposit condition for filing an appeal before the Tribunal stood satisfied?

Observation of the Court:

[Para 6–9]

• The Court noted that the refund of IGST amounting to ₹1,17,59,177/- had been made and redeposited with the State GST authorities.

• It held that factual determination regarding the nature of supply (inter or intra-State) was necessary before dealing with the constitutional challenge.

• The condition of pre-deposit for appeal filing was considered satisfied based on redeposit of refunded IGST.

Judgement of the Court:

[Para 7–10]

• The High Court disposed of the writ petitions, directing the petitioner to approach the yet-to-be-constituted GST Tribunal.

• The Court clarified that the vires (constitutional validity) issue remains open.

• No recovery proceedings shall continue if authorities are satisfied with the pre-deposit compliance.

• The petitioner must file an appeal within three months from the constitution of the Tribunal.

Between Fine Lines

• GST dispute on tax jurisdiction (IGST vs CGST/SGST) must first be factually adjudicated.

• Petitioner complied with pre-deposit by depositing refunded IGST.

• High Court refrained from ruling on constitutional validity due to absence of factual findings.

• Matter redirected to GST Tribunal for full adjudication.

• Recovery proceedings stayed till Tribunal is approached.

Summary of Referred Cases

The above summary is for academic purposes only; it does not constitute legal opinion. The author is not responsible for any actions taken based on this content.