Vinayak Electricals Vs Commercial Tax Officer/State Tax Officer (Madras High Court)
Summary: The Madras High Court disposed of a writ petition filed by Sri Vinayak Electricals seeking re-credit of Input Tax Credit (ITC) of Rs.3,01,903/- for assessment year 2018-19 to its electronic credit ledger. Pursuant to an earlier remand by the High Court, the respondent had heard the matter and allowed the petitioner’s ITC claim on 25.07.2025. The petitioner thereafter applied for and was granted refund of Rs.3,01,903/-. Since the amount ought not to have been refunded to the petitioner’s bank account, the petitioner was subsequently called upon to repay it. The petitioner repaid the refunded amount along with interest and approached the High Court for restoration of the amount to its electronic credit ledger. TaxGuru has separately published CBIC’s circular on re-credit to the electronic credit ledger.
The respondent submitted that Rs.3,01,903/- would be re-credited to the petitioner’s electronic credit ledger provided the petitioner filed an application for that purpose. The High Court observed that, pursuant to the order dated 25.07.2025, the petitioner was entitled to ITC. Although a refund had been made on 08.09.2025, the petitioner was asked to repay it because the matter pertained to ITC, and such repayment had been made. The Court held that the petitioner was undoubtedly entitled to the amount by way of re-credit to the electronic credit ledger. It permitted the petitioner to file an appropriate application for re-credit of ITC of Rs.3,01,903/- within fifteen days from receipt of the order and directed the respondent to re-credit the amount within fifteen days thereafter. No order was made as to costs. A separate TaxGuru report discusses a Delhi High Court ruling on re-credit of ITC.
FULL TEXT OF THE ORDER OF MADRAS HIGH COURT
Pursuant to the remand by this Court, the matter was heard by the respondent and the petitioner’s claim for Input Tax Credit (ITC) was allowed on 25.07.2025. Thereafter, the petitioner applied for and was granted refund of a sum of Rs.3,01,903/-. On the ground that such refund should not have been made to the petitioner’s bank account, the petitioner was called upon to repay the amount refunded. Such refund was made along with interest. The petitioner has approached this Court in these facts and circumstances seeking a direction for re-credit of the said sum to the petitioner’s electronic credit ledger within a specified time frame.
2. Mr.R.Sethu Prabakaran, learned Government Advocate (Tax), appears for the respondent. He submits that a sum of Rs.3,01,903/- would be re-credited to the petitioner’s electronic credit ledger, provided an application for such purpose is filed by the petitioner.
3. Pursuant to order dated 25.07.2025, the petitioner was entitled to ITC. Therefore, refund was made on 08.09.2025. Because the matter pertains to ITC, it appears that the petitioner was called upon to repay the sum refunded and this was done. Undoubtedly, the petitioner is entitled to this amount by way of re-credit to electronic credit ledger.
4. Considering these aspects, this writ petition is disposed of on the following terms:
4.1 The petitioner may file an appropriate application for re-credit of ITC of Rs.3,01,903/- to his electronic credit ledger;
4.2 Such application may be filed within fifteen days from the date of the receipt of a copy of this order;
4.3 Within fifteen days therefrom, the respondent shall re-credit the amount to the electronic credit ledger of the petitioner.
There shall be no order as to costs.
