Dhanyamol V Vs State Tax Officer (Kerala High Court)
The Kerala High Court considered an appeal against the dismissal of a writ petition challenging an order under which credit of Rs.3,62,061/- in GST had been rejected by the 2nd respondent through an order dated 07.08.2023. The respondents contended that the 1st respondent had no option but to issue the impugned order, Ext.P4, since the 2nd respondent had already rejected the appellant’s entitlement to the credit.
During the appeal, the Court directed production of the letter referred to as Item No.3 in Ext.P4, which was placed on record along with a Memo dated 23.03.2026. The appellant’s counsel submitted that the appellant became aware of the 2nd respondent’s order dated 07.08.2023 only when it was produced before the Court and that neither the order nor any preceding notice had been received by her. The appellant had subsequently filed an application before the 2nd respondent on 03.04.2026 seeking appropriate orders on the credit claimed. The appellant requested consideration of that application and consequential reconsideration of Ext.P4.
The 2nd respondent’s counsel stated that if the application remained pending, it could be considered in accordance with law, while requesting that the Court leave all issues for determination by that authority. The Government Pleader for respondents 1 and 3 submitted that the 1st respondent could vary Ext.P4 only if the 2nd respondent took a different view regarding the claim for the CGST component.
The Court found force in the submission that the 1st respondent could not be blamed when the 2nd respondent’s order stood against the appellant. However, it held that the appellant should not be prejudiced if she could establish entitlement to the TRAN credit claimed by her.
Accordingly, the High Court allowed the appeal and set aside the impugned judgment. It directed the 2nd respondent to consider the appellant’s application dated 03.04.2026, after providing her an opportunity of hearing, as expeditiously as possible and within three months from receipt of the judgment. Depending on that decision, the 1st respondent was directed to reconsider Ext.P4 in accordance with law and after providing an opportunity of hearing. The Court clarified that although Ext.P4 was not set aside, it was also not approved. If the TRAN credit was granted, the 1st respondent was to issue appropriate orders modifying Ext.P4; otherwise, the authority could leave Ext.P4 intact.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The learned Single Judge has dismissed the Writ Petition filed by the appellant adverting to the statements in Ext.P4 – being the impugned order – that the 2nd respondent had rejected the credit of Rs.3,62,061/- in GST, availed by the former, through an order dated 07.08.2023.
2. The argument of the then learned Government Pleader for respondents 1 and 3 was that there was no option available to her clients to issue any order other than Ext.P4, when the 2nd respondent had already rejected the entitlement of the appellant to the aforesaid credit.
3. Noticing the afore submissions, we directed the learned Government Pleader to produce on record the copy of the letter referred to as Item No.3 in Ext.P4; and the same has been made available along with a Memo dated 23.03.2026.
4. Sri. Devananda Narasimham – learned counsel for the appellant, vehemently argued that his client came to be aware of the order of the 2nd respondent dated 07.08.2023 only when it was produced before this Court; and that neither its copy, nor a notice preceding it, has ever been received by her. He added that, in such circumstances and by way of abundant caution and since his client is only seeking what is legitimate to her, she preferred an application before the 2nd respondent, praying to pass necessary orders on the credit claimed by her; and pointed out that this was preferred as early as on 03.04.2026, pending this Appeal. He pleaded that the 2nd respondent be directed to consider the said application – which has been produced as Annexure A along with I.A.No.1/2026 before this Court; consequentially praying that, depending upon the result of such exercise, the 1st respondent be ordered to revise Ext.P4 appositely.
5. Sri .P.R.Sreejith – learned Senior Panel Counsel appearing for the 2nd respondent, submitted that, if Annexure A mentioned above is still pending before his client, it can be considered in terms of law; but, praying that this Court make no affirmative declarations in favour of the appellant and leave every issue to be decided by the said respondent.
6. Sri. Sudhish Kumar S. – learned Government Pleader for respondents 1 and 3, submitted that, it is only if the 2nd respondent takes a different view on the claim for credit of the CGST component, can his client vary from the decision taken in Ext.P4.
7. There is force in the afore submissions of the learned Government Pleader because, we cannot blame the 1 st respondent in any manner, when the order of the 2nd respondent stood against the appellant. However, we are of the firm view that the appellant should not be prejudiced, if she is able to establish that she is entitled to the TRAN credit, as claimed by her before the 2nd
In such perspective we allow this Appeal and set aside the impugned judgment, with the following directions:
a) The 2nd respondent will take up Annexure A application preferred by the appellant before him on 03.04.2026 – marked as Annexure A before this Court, along with I.A.No.1/2026 – and dispose of the same, after affording her necessary opportunity of being heard, as expeditiously as is possible, but not later than three months from the date of receipt of a copy of this judgment.
b) Depending upon the afore decision and on the same being produced before the 1st respondent, the said Authority will reconsider Ext.P4 in terms of law, also after affording the appellant necessary opportunity of being heard. For this purpose, we clarify that, though we have not set aside Ext.P4, we have not approved it either; and that it is left to be modified or otherwise by the 1st respondent in terms of these directions. To paraphrase, if the benefit of the TRAN credit is to be given by the 2nd respondent to the appellant, then the 1st respondent will issue appropriate orders in modification of Ext.P4; but if it is to the contrary, then the said Authority will be entitled to leave the said order in tact.
