Department Cannot Adjust VAT ITC Post-GST When Law Mandates Cash Refund

Larsen and Tourbo Limited Vs Deputy Commissioner (ST)-II (Madras High Court) The Madras High Court in Larsen and Toubro Ltd. v. Deputy Commissioner (ST)-II held that pre-deposit made under the VAT regime through input tax credit (ITC) must be refunded in cash after the introduction of GST, in accordance with Section 142(6) of the CGST Act. The petitioner had deposited 10% of the disputed tax using ITC during litigation, and later succeeded when the issue of including freight and pumping charges in taxable value was decided in its favour. Despite issuance of refund orders, the department denied...