Shapoorjipallonji And Company Private Limited vs. Union Of INDIA

Held

The Court held that the Order-in-Appeal dated December 26, 2020, and the Order-in-Original dated October 17, 2019, were to be set aside. The matter was remanded back to the respective respondents for reconsideration in light of Circular No. 166/22/2021-GST. The Court noted the petitioner's submission that this circular permits the refund of TDS/TCS amounts deposited in the electronic cash ledger, as per the relevant provisions of the CGST Act. The Court directed that this reconsideration exercise be completed within three months from the date of receipt of the order. No issue was expressly left undecided.

Facts

The petitioner, Shapoorji Pallonji And Company Private Limited, a registered dealer under the GST Act, accumulated a credit balance in its cash ledger due to TDS amounts credited by deductors. After discharging its tax liability using available Input Tax Credit (ITC), the petitioner sought a refund of the remaining TDS amount in the cash ledger. The Assessing Authority rejected this refund application on October 17, 2019. The petitioner appealed to the Appellate Authority, who upheld the Assessing Authority's decision, citing the principle of unjust enrichment and deeming the TDS amount non-refundable. Aggrieved by the Appellate Order dated December 26, 2020, the petitioner filed the present Writ Petition.

Key Issues

1. Whether the accumulated TDS amount in the cash ledger, after discharging tax liability, is refundable to the petitioner under the CGST Act, 2017, particularly in light of subsequent circulars. The petitioner argued that the Appellate Authority's order was superseded by Circular No. 166/22/2021-GST dated November 17, 2021, which permits the refund of TDS/TCS amounts deposited in the electronic cash ledger, in accordance with the proviso to sub-section (1) of Section 54 read with sub-section (6) of Section 49 of the CGST Act. The revenue or State did not record any specific arguments in the judgment.