Madras HC Directs GST Dept to Expedite Review of 14.5% Interest Levy Dispute

Trupthi Enterprises Vs Assistant Commissioner [ST] (Madras High Court)

Madras High Court addressed a dispute involving Trupthi Enterprises, a reseller, challenging an assessment order dated December 8, 2022, which levied a 14.5% interest rate instead of the expected 5%. The petitioner argued that the entire tax amount had already been recovered, making them eligible for a refund. Despite submitting a rectification application on January 31, 2023, no action had been taken by the GST department. The respondent, representing the GST department, acknowledged the need for a rectification application but claimed it had not been received. The court directed Trupthi Enterprises to resubmit the application within 15 days and ordered the GST department to dispose of the rectification application within four weeks, including providing a personal hearing to the petitioner. The case was disposed of with these instructions and without costs.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

Challenging he assessment order dated 08.12.2022, passed by the respondent and for a direction to the respondent to refund the amount of Rs.2,54,242/- with interest recovered from the petitioner.

2. The learned counsel appearing for the petitioner submitted that the petitioner is not a manufacturer of any goods and he is only a re-seller. The petitioner is also filing the returns declaring the same as sales either under the Tamil Nadu Value Added Tax Act, 2006 and also under the Central Sales Tax Act, 1956. Whereas the impugned Order has been passed directing the petitioner to pay 14.5% interest instead of 5%. In this regard the petitioner has given rectification application on 31.01.2023. Since the entire tax amount has already been recovered from the petitioner, he is entitled for refund. Hence, the order passed by the respondent has to be set aside.

3. The learned Government Advocate appearing for the respondent submitted that a rectification application has to be filed by the petitioner and on such application, the same will be considered. Further, he would submit that the rectification application filed by the petitioner has not been received by the Hence, he would submit that the petitioner may be directed to file a fresh rectification application, for which the petitioner still have time limit and limit has not been expired.

4. In reply, the learned counsel appearing for the petitioner submitted that the petitioner will submit a copy of the rectification application dated 3 1.01.2023 to the respondent.

5. Considering the submissions made by the petitioner as well as the respondent, since no Order has been passed in the rectification application filed by the petitioner dated 3 1.01.2023, this Court is inclined to dispose of this Writ Petition with the following Order :-

[i] that the petitioner is directed to file a copy of the rectification application dated 31.01.2023 to the respondent within a period of 15 days from the date of receipt of a copy of this Order.

[ii] on such application being filed, the respondent is directed to dispose of the rectification application within a period of four weeks thereafter, after affording an opportunity of personal hearing to the petitioner.

6. With the above directions, this writ petition is disposed of. No costs.