Karnataka High Court Directs Department to Decide Refund Claim for Excess Recovery Beyond 20% of Disputed Demand

SJR Enterprises Limited Vs DCIT (Karnataka High Court)

Karnataka High Court Directs Department to Decide Refund Claim for Excess Recovery Beyond 20% of Disputed Demand

The Karnataka High Court disposed of a writ petition filed by the assessee seeking refund of the amount adjusted in excess of 20% of the disputed tax demand pending disposal of the first appeal. The assessee relied on the High Court’s earlier decision in W.P. No. 17212/2025, contending that recovery beyond 20% of the disputed demand was impermissible and that the excess amount should be refunded along with interest under Section 244A.

The Revenue submitted that the assessee’s representation would be considered in the light of the earlier High Court judgment. Recording this submission, the Court directed the Department to decide the assessee’s representation within four weeks in the backdrop of its earlier decision and communicate the outcome to the assessee. Liberty was also granted to the assessee to furnish a certified copy of the order to the authorities. The Court did not adjudicate the merits of the refund claim but ensured its expeditious consideration.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

The petitioner has filed this petition for consideration of the Representation dated 21.05.2026 [Annexure-G]. The petitioner’s Representation relates to a request for a refund of the amount adjusted in excess of 20% of the demand. Sri Narendra Kumar J Jain, the learned counsel for the petitioner, relies upon the Orders of this Court dated 11.09.2025 in the writ petition in W.P. No. 17212/2025 to contend that the petitioner is entitled to refund of the amount set off in excess of 20% of the Demand.

When queried, Sri Y V Raviraj and Sri Vinayaka G Pandit, the learned counsels for the first, second and fourth respondents, submit that the representation will be considered in the light of this Court’s order in the aforesaid writ petition. Hence the following:

ORDER

[a] The writ petition stands disposed of calling upon the respondents to decide on the petitioner’s representation in the backdrop of this Court’s order in the writ petition in W. P. No.17212/2025 and communicate the decision to the petitioner within four [4] weeks from the date of receipt of a certified copy of this order.

[b] The petitioner is reserved with liberty to file a certified copy of this order with the respondents within a week from the date of receipt thereof.