Case Law Details

Case Name : Evertime Overseas Private Limited Vs Union of India and ors. (Bombay High Court)
Appeal Number : Writ Petition No. 3793 of 2021
Date of Judgement/Order : 08/10/2021
Related Assessment Year :

Evertime Overseas Private Limited Vs Union of India and ors. (Bombay High Court)

Evertime Overseas Private Limited (Petitioner) filed petition claiming that he is entitled to refund under the provisions of Section 16 of the Integrated Goods and Services Tax Act, 2017 (IGST Act).

Factually, the Petitioner claimed the refund under the provisions of Section 16 of the IGST Act in respect of the goods that have been supplied & exported. It is submitted by the Petitioner that the claim for refund is not being processed by Respondent on the ground that the investigation is pending against the Petitioner.

The Petitioner invited attention to the provisions of  Section 54(10) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) which says that where any refund is due under Section 16(3) of the CGST Act to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty which has not been stayed by any Court, Tribunal or Appellate Authority by the specified date, the proper officer may withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be and deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under the CGST Act or under the existing law.

Notebook with a Business notes IGST REFUND on the office table with tools

Moreover, the Petitioner submits that in the teeth of the provisions of Section 54(10) of the CGST Act, the action on the part of the Respondent refusing to process the refund on the ground that the investigation is pending is untenable. On the other hand, the Respondent submitted that the department is justified in not processing the application on the count of a pending investigation to secure the interest of the revenue.

The Hon’ble Bombay High Court held that there is no order or decision on record against the Applicant claiming refund. And it would be appropriate to direct the Respondent to process the application made by the Petitioner for refund and pass a reasoned order upon hearing the Petitioner. The claim for refund be decided as expeditiously as possible on its own merits and preferably within a period of eight weeks from today.

Relevant Provisions:

Section 54 (10) of the CGST Act: Where any refund is due under sub-section (3) to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper officer may-

(a) withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be;

(b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.

Explanation.– For the purposes of this sub-section, the expression “specified date” shall mean the last date for filing an appeal under this Act.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY  HIGH COURT

1. The petitioner claimed that he is entitled to refund under the provisions of section 16 of the Integrated Goods and Services Tax Act, 2017 (hereafter “the IGST Act” for short). It is the case of learned counsel that in respect of the goods that have been supplied, the petitioner is entitled to claim the refund under sub-section 3(b) of section 16 of the said Act. It is submitted that the claim for refund is not being processed by respondent no.4 on the ground that the investigation is pending against the petitioner.

2. Learned counsel for the petitioner invited our attention to the provisions of sub-section 10 of section 54 of the Central Goods and Services Tax Act, 2017 (hereafter “the CGST Act” for short). Sub-section 10 of section 54 of the CGST Act reads thus :-

“(10) Where any refund is due under sub-section (3) to a registered person who has defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper officer may-

(a) Withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be;

(b) Deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law.”

3. Learned counsel submits that in the teeth of the provisions of sub-section 10 of section 54 of the CGST Act, the action on the part of the respondents refusing to process the refund on the ground that the investigation is pending is untenable. Our attention is invited to one such application made on May 18, 2021 which is at page 92 of the petition seeking release of the outstanding amount of drawback and IGST refund.

4. Mr. Mishra, learned counsel appearing on behalf of the respondent Nos.2 to 4 submitted that the department is justified in not processing the application on the count of a pending investigation to secure the interest of the revenue.

5. In our opinion and having regard to the facts of the present case, it would be appropriate if the claim for the refund is processed by the respondents in accordance with law. We find that there is no order or decision on record on the application claiming refund. In this view of the matter, it would be appropriate to direct the respondent No.4 to process the application made by the petitioner for refund and pass a reasoned order upon hearing the petitioner. The claim for refund be decided as expeditiously as possible on its own merits and preferably within a period of eight weeks from today. The petitioner to appear before the Competent Authority on October 21, 2021 at 11.00 a.m.

6. All contentions are kept open.

7. The writ petition is disposed of. There shall be no order as to costs.

*****

(Author can be reached at [email protected])

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