M/S.D.N. Bharat Kumar vs. The Assistant Commissioner (State Tax)

Held

The Court disposed of the writ petition by directing the first respondent to consider the petitioner's application dated 03.08.2022 seeking refund within a period of two weeks from the date of receipt of a copy of the order, in accordance with law. The Court did not explicitly rule on the validity of the rejection order or the entitlement to interest, but rather directed the authority to process the refund application. The reasoning appears to be based on the acknowledgement by the revenue that the petitioner was entitled to the refund as per the circular, and the need to expedite the process. The operative direction is to consider the application and process the refund as per law. No specific findings were recorded on the issues of arbitrariness, violation of natural justice, or the exact amount of interest, as the matter was resolved by a direction to consider the application.

Facts

The petitioner filed a writ petition seeking a mandamus to declare the action of the first respondent in rejecting their claim for a refund of Rs. 1,31,574/- from the electronic cash ledger as arbitrary and violative of natural justice. The petitioner also sought to declare the notice in FORM GST RFD-08 and the order in FORM GST RFD-06 rejecting the refund as void. The petitioner contended that they made an application for refund on 03.08.2022, in terms of Circular No.166/22/2021 dated 17.11.2021. The respondents, represented by the learned Government Pleader, acknowledged that the petitioner was entitled to the refund based on the circular and that the request was under process, though there was a dispute regarding interest payment. The Court was asked to direct the refund of Rs. 1,31,574/- along with interest.

Key Issues

1. Whether the action of the first respondent in rejecting the petitioner's claim for a refund of Rs. 1,31,574/- from the electronic cash ledger, without following due procedure and affording an opportunity of hearing, is arbitrary, unsustainable, without jurisdiction, and violative of principles of natural justice and Article 300A of the Constitution of India. 2. Whether the notice in FORM GST RFD-08 and the order in FORM GST RFD-06 issued by the first respondent, rejecting the refund without following statutory procedure, are non-est and void. 3. Whether the petitioner is entitled to a refund of Rs. 1,31,574/- along with interest at 9% per annum under the proviso to Section 56 of the SGST Act. Petitioner's Contentions: The petitioner argued that the rejection of their refund claim was arbitrary and violative of natural justice. They relied on Circular No.166/22/2021 dated 17.11.2021 for their refund application. They sought a direction for the refund along with interest. Revenue's Contentions: The learned Government Pleader for Commercial Tax submitted that the petitioner is entitled to the refund in view of the circular dated 17.11.2021 and that the request was under process, with a dispute concerning interest payment.