HC directed Competent Authority to deposit amount of GST refund directly in bank account of assessee

Hardik Textiles Through Its Prop. Hardik Patel (Gujrat High Court)

It is not in dispute that due to the mistake of the consultant engaged by the petitioner, the amount has been deposited in the wrong account. The bank details are to be entered under RFD-05. The petitioner also did not raise the grievance immediately and made an application with reference to the said issue after nearly three months. The amount which had gone to the wrong account of M/s. Meet Textiles had been refunded on 09.12.2020 by way of DRC-03 under Section 73(5) by way of voluntary payment. The Deputy State Tax Commissioner Circle-16, Surat vide its communications dated 21.01.2021 and 11.02.2021 had requested the Joint Commissioner of State Tax E-governance, Gujarat State to resolve the peculiar issue on hand.

It emerges that second time when the application had been made by the petitioner, the rejection has come as there is a technical glitch. Even by specifying that the refund is being claimed under the head “others” the system has not permitted the amount to be given by way of refund to the petitioner. Undoubtedly, it was a mistake which was committed by the consultant of the petitioner and therefore, the third party namely M/s. Meet Textiles had been benefited where the amount had been deposited.

The amount once again has gone back to the authority by way of DRC-03 on 09.12.2020, hence, the only way out now for availing the legitimate claim of the petitioner is by depositing the amount in his account which he has mentioned.

Let the refund amount be accordingly credited in the bank account of the petitioner having Account No. 00211101004059 with the Mehsana Urban Co-operative Bank Limited, as it is not the fault of the petitioner to be deprived of this amount of refund and the stand on the part of both the counsels of the respondents also being fair, according to them, this is a technical glitch as the system itself does not permit it to happen, therefore, we are constrained to interfere.

Let the same be done as the application has already been made. No further application will be necessary at a manual level. The officer concerned shall apply the mind and the deposit shall go directly in the account of the petitioner.

FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT

1. The petitioner, in the present petition under Article 226 of the Constitution of India, is seeking to approach this Court being aggrieved by the fact that the eligible refund amount which was credited in the wrong account due to inadvertent mistake of the petitioner’s consultant should not penalize the petitioner.

2. The prayers sought for are as follow: –

“(a) Issue appropriate writ/order/direction for respondents to take appropriate action in this regard and disburse the amount of eligible Refund to the petitioner’s account i.e. Account No. 00211101004059 with The Mehsana Urban Co-Op Bank Ltd.

(b) To issue order(s), direction(s), writ(s) or any other relief(s) as this Hon’ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice;

(c) To award costs of and incidental to this application be paid by the respondents.”

3. The brief facts leading to the present petition is that the petition is engaged in the business of manufacturing. According to the petitioner, it is entitled to claim refund of accumulated ITC as per Section 54(3) of Central Goods and Services Tax Act, 2017 and  Section 54(3) of the State Goods and Services Tax Act, 2017.

3.1. The petitioner appointed a GST consultant Chartered Accountant Mr. Patel who undertook the entire process of refund claim who consultant had filed the GST refund application in Form GST RFD-01 on 08.09.2020 for the period from August, 2018 to February, 2020. The respondent no.3 issued the payment order in RFD-05 dated 28.09.2020 against the application for refund claim on 08.09.2020.

3.2. The payment order in RFD-05 was not credited in the petitioner’s account with the Mehsana Urban Co-operative Bank Limited. This was when brought to the notice of the consultant, he had checked the details from the online portal and realized that mistakenly he had given the bank account details of another client and thus, the details entered in the petitioner’s GST is of one M/s. Meet Textiles having account with Prime Co-operative Bank Ltd. The correct bank account details of the petitioner with the Mehsana Urban Co-operative Bank Limited having Account No. 00211101004059 also has been furnished.

3.3. On seeking confirmation from M/s. Meet Textiles that total amount of Rs. 7,59,531/- was credited in its account in the month of October, 2020, this mistake was rectified and the amount sent to M/s. Meet Textiles has gone back to the Government’s account through DRC-03 on 09.12.2020.

3.4. The request made for finding out the solution and providing the guidance had not been responded to. The petitioner since was left with no remedy, he once again approached for the fresh refund application and there the reason for claim of refund was mentioned “any other”. The said application moved alongwith the supporting documents on 07.02.2021 also has not been positively responded.

3.5. The second time rejection of the application dated 07.02.2021 has come on 25.03.2021 and this has driven the petitioner to this Court with the prayers as mentioned hereinabove.

4. The affidavit-in-reply is filed by the respondent no.4 – Assistant Commissioner of State Tax in the State Tax Department. The chronology of events have not been disputed however, according to the respondent, this is more a technical issue where undisputedly the mistake on the part of the Chartered Accountant of the petitioner has resulted into the amount being deposited in some other account. The issue could not be resolved by the amount going directly in the account of the petitioner and hence, the GSTN has been impleaded as party respondent and a fresh application was the only way out. That also when has not been responded to positively, the petitioner is before this Court with the aforementioned prayers.

5. We have heard learned advocate Mr. Avinash Poddar appearing for the petitioner, learned Senior Standing Counsel Mr. Priyank Lodha appearing for respondent no.5 and learned Assistant Government Pleader Mr. Trupesh Kathiriya appearing for respondent nos. 1 to 4.

6. It is not in dispute that due to the mistake of the consultant engaged by the petitioner, the amount has been deposited in the wrong account. The bank details are to be entered under RFD-05. The petitioner also did not raise the grievance immediately and made an application with reference to the said issue after nearly three months. The amount which had gone to the wrong account of M/s. Meet Textiles had been refunded on 09.12.2020 by way of DRC-03 under Section 73(5) by way of voluntary payment. The Deputy State Tax Commissioner Circle-16, Surat vide its communications dated 21.01.2021 and 11.02.2021 had requested the Joint Commissioner of State Tax E-governance, Gujarat State to resolve the peculiar issue on hand.

7. It emerges that second time when the application had been made by the petitioner, the rejection has come as there is a technical glitch. Even by specifying that the refund is being claimed under the head “others” the system has not permitted the amount to be given by way of refund to the petitioner. Undoubtedly, it was a mistake which was committed by the consultant of the petitioner and therefore, the third party namely M/s. Meet Textiles had been benefited where the amount had been deposited.

8. The amount once again has gone back to the authority by way of DRC-03 on 09.12.2020, hence, the only way out now for availing the legitimate claim of the petitioner is by depositing the amount in his account which he has mentioned.

9. Let the refund amount be accordingly credited in the bank account of the petitioner having Account No. 00211101004059 with the Mehsana Urban Co-operative Bank Limited, as it is not the fault of the petitioner to be deprived of this amount of refund and the stand on the part of both the counsels of the respondents also being fair, according to them, this is a technical glitch as the system itself does not permit it to happen, therefore, we are constrained to interfere.

10. Let the same be done as the application has already been made. No further application will be necessary at a manual level. The officer concerned shall apply the mind and the deposit shall go directly in the account of the petitioner. The process to be completed in four (4) weeks period, lest it shall fetch interest at the rate of 12% from the date of second application.

11. Disposed of accordingly.