Manaksia Aluminium Company Limited has received a GST demand order of Rs 38.80 crore along with a penalty of Rs 3.88 crore plus interest. The order is based on Rule 96(10) of CGST Rules, which has been declared invalid by courts and later omitted, raising questions on enforceability.
Manaksia Aluminium Company Limited faces a significant tax challenge after authorities issued a demand order under Section 73(9) of the CGST Act, 2017. The order relates to recovery of alleged erroneous refunds for the period October 2018 to March 2022. However, recent judicial rulings and government notifications cast doubt on the validity of such demands.
Key Highlights
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GST demand raised: Rs 38.80 crore
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Penalty imposed: Rs 3.88 crore plus applicable interest
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Legal basis: Recovery of erroneous refund under Section 73(9) of CGST Act, 2017
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Rule 96(10) declared ultra vires by Kerala High Court as arbitrary and unenforceable
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Rule 96(10) omitted via Notification No. 20/2024-Central Tax dated 08.10.2024 due to exporter difficulties
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Uttarakhand High Court (30.04.2025) held that no order can be passed under Rule 96(10) after its omission
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Binding precedents: In absence of contrary rulings from Calcutta High Court or Supreme Court, decisions of Kerala and Uttarakhand High Courts apply nationwide under Articles 141 and 226
The development highlights ongoing uncertainty in GST enforcement, especially concerning refund claims linked to exports. Industry experts believe the case could set a precedent for similar disputes across India.
Sources: Company Disclosure to the Stock Exchanges