President Trade And Exim Corporation Vs State of Maharashtra & Ors. (Bombay High Court)
Bombay HC: Refund for one Tax Period cannot be adjusted against future Tax Period under MVAT Act when dues for future Tax Period are already settled under Amnesty Scheme
The Bombay High Court in “President Trade and Exim Corporation Versus The State of Maharashtra & Ors., Writ Petition (L) No. 16027 of 2024 dated 12/02/2026” held that refund which was due to the Petitioner for Tax Period: 2007-08 under the Maharashtra Value Added Tax Act 2002 could not have been adjusted against dues of Tax Period: 2008-09 since on the date of refund adjustment, the Petitioner had already opted for the Amnesty Scheme 2023 (Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act 2023) by way of payment of the requisite amount. Hence, the refund adjustment was held to be contrary to Article 265 of the Constitution and the Bombay High Court was pleased to grant the refund along with interest.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule made returnable forthwith. Respondents waive service. By consent of the parties, heard finally.
2. This petition under Article 226 of the Constitution of India is filed praying for the following reliefs:
“a) This Hon’ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, setting aside and annulling the Refund Sanction-cum-Refund Adjustment Order which illegally adjusted the refund of tax Period : 2007-08 against alleged dues of Tax Period : 2008-09 ignoring the fact that there were no pending ‘dues for recovery’ so as to justify invocation of refund adjustment under the proviso appended to Section 50(1) of the MVAT Act, 2003 as the petitioner had already made an application for availing benefits under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act, 2023 before issuance of the refund adjustment order.
b) This Hon’ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, setting aside and annulling the Refund Sanction-cum- Refund Adjustment Order which illegally adjusted the refund of Tax Period: 2007-08 against alleged dues of Tax Period: 2008-09 without issuance of any defect notice and after the Petitioner had already made an application and had also paid the settlement dues under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act, 2023 as per instructions received in the Courtesy Letter issued by Respondent No. 2.
c) This Hon’ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, setting- aside and annulling the Refund Sanction-cum- Refund Adjustment Order which illegally adjusted the refund of Tax Period: 2007-08 against alleged dues of Tax Period: 2008-09 ignoring that the provisions of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act, 2023 would override the provisions of the MVAT Act, 2002 once an application has been made under the Scheme and no deficiency by way of Defect Notice has been issued.
d) This Hon’ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, setting- aside and annulling the Refund Sanction-cum-Refund Adjustment Order which illegally adjusted the refund of Tax Period: 2007-08 against alleged dues of Tax Period: 2008-09 without providing a reasonable opportunity of being heard resulting in grave violation of principles of natural justice.
e) This Hon’ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, directing Respondent Nos. 2 and 3 to give effect to the Appeal Order dated 10th May, 2023 and to pay a refund of Rs. 33,29,000/- to the Petitioner.
f) This Hon’ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, directing Respondent Nos. 2 and 3 to pay additional interest amount u/s 53 of the MVAT Act, 2002 along with the principal refund amount of Rs.33,29,000/- as the refund amount was not paid to the petitioner within 3 months from the date of the Appeal Order..
g) This Hon’ble High Court may be pleased to issue any other Writ, order or direction that this Hon’ble Court may deem fit in the circumstances of the case.”
3. The facts lie in a narrow compass : The three financial years as involved are 2007-08, 2008-09 and 2009-10. The relief as sought for by the petitioner is in respect of refund entitled to the petitioner under the Assessment order for the Financial Year 2008-09, however, the same has been denied to the petitioner, is the grievance as canvassed in the present proceedings.
