Mohan Footcare Pvt. Ltd Vs Deputy Commissioner of CGST (Delhi High Court)
The Delhi High Court, in the case of Mohan Footcare Pvt. Ltd. Vs Deputy Commissioner of CGST, delivered a judgment upholding the principle that a technical limitation on the Goods and Services Tax (GST) portal cannot override a taxpayer’s legal entitlement to Input Tax Credit (ITC). The court directed the GST Department to manually re-credit Rs. 23,32,278/- to the petitioner’s Electronic Credit Ledger after the portal’s lack of functionality prevented the action.
Factual Background of the Dispute
The dispute originated in March 2018 when Mohan Footcare Pvt. Ltd. filed a refund claim for accumulated ITC, citing an inverted duty structure. In September 2018, the Department issued a Refund Sanction Order (FORM GST RFD-06), sanctioning a total amount. However, the Department partially adjusted the sanctioned amount by Rs. 23,32,278/-, claiming it was adjusting for “erroneous refunds” issued to the petitioner for the period of July 2017 to February 2018. Consequently, only the reduced balance was released.
Following this adjustment, the petitioner engaged in extensive correspondence with the Department, requesting the issuance of Form GST PMT-03 to re-credit the adjusted sum back to its Electronic Credit Ledger. The petitioner even complied with a subsequent demand from the Department by paying the required interest on the adjusted amount.
