Facts of the Case

Zydus Wellness-Sikkim's claim for budgetary support of Rs.59,44,977/-, filed under the Central budgetary support scheme for units in Sikkim and the North-East (notified vide F.No.10(1)/2017-DBA-II/NER and connected SROs), was rejected by an order dated 27.06.2022 of the Assistant Commissioner, Central Goods and Service Tax, Gangtok Division, on the ground that the eligible budgetary support, on verification, worked out to a negative figure. The petitioner challenged this rejection, pointing to an intervening Division Bench ruling of the same High Court on an identical issue.

Issues Involved

  1. Whether budgetary support reimbursement, though claimed on a quarterly basis under the scheme, must be computed by reference to monthly GST payments and monthly GSTR-3B filings.
  2. Whether the petitioner's claim should be remanded following the Division Bench's ruling in Glenmark Pharmaceuticals, which itself followed the Jammu & Kashmir High Court's Coromandel International ruling.

Petitioner's Arguments

  • Relied on the Division Bench ruling in Glenmark Pharmaceuticals Limited v. Union of India (WA No.02 of 2024, dated 15.05.2025), which had directed reconsideration of an identical budgetary-support claim on the same terms as considered in Coromandel International Ltd. v. Union of India (2023 (74) GSTL 208, J&K and Ladakh).

Respondent's Arguments

  • The Deputy Solicitor General of India had no objection to the submissions advanced by the petitioner in view of the Glenmark Pharmaceuticals ruling.

Court Order / Findings

  • The Court extracted the Division Bench's reasoning in Glenmark Pharmaceuticals, which held that although the budgetary support scheme provides for quarterly claims, since GST returns are filed monthly (GSTR-3B) and taxes paid monthly, the reimbursement amount should be calculated on a monthly basis even though disbursed quarterly — drawing on a CBIC circular dated 10.01.2019 and a departmental clarification dated 26.04.2022 issued for Jammu & Kashmir, applied by analogy for its rationale.
  • Holding that the doctrine of judicial comity required consistency with its own coordinate Division Bench ruling on an identical issue, and finding no further discussion necessary as the matter was no longer res integra, the Court set aside the order dated 27.06.2022.
  • The writ petition was disposed of in terms of the Glenmark Pharmaceuticals ruling, directing reconsideration of the claim on a monthly-computation basis.

Important Clarification

  • Under the budgetary support scheme for units availing area-based exemption post-GST, even though claims are filed quarterly, the reimbursement itself must be computed with reference to monthly cash-ledger tax payments and monthly GSTR-3B filings, not reduced arbitrarily for unutilised ITC lying at quarter-end — a position now settled by a line of authority running from Coromandel International through Glenmark Pharmaceuticals.

Sections Involved

  • Budgetary Support Scheme Notification F.No.10(1)/2017-DBA-II/NER, dated 05.10.2017 — governing quarterly claim cycle for budgetary support.
  • GSTR-3B — monthly return under the CGST Act/Rules, whose monthly cash-ledger payments underpin the reimbursement computation.

Decision – In Favour of

The order is in favour of the Assessee. The rejection was set aside and the claim remanded for computation on a monthly basis, following the Court's own Division Bench precedent.

Case Details

Court: High Court of Sikkim at Gangtok
Case No.: WP(C) No. 10 of 2024
Neutral Citation: 2025:SHC:93
Coram: Hon'ble Mrs. Justice Meenakshi Madan Rai
Date of Order: 11th August, 2025

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