M/S. Silk And Rayon PVT. LTD. (Sls Textiles) A PVT. LTD. Company vs. Union Of INDIA And Ors.
Original PDF →Facts
The appellant, M/s. Silk & Rayon Private Limited (SLS Textiles), is seeking a refund of excess tax paid. The revenue authorities issued a deficiency memo on November 22, 2023, stating that the re-credit of the refund amount to the ITC ledger was not permitted by the system. The memo advised the appellant to file a fresh refund application after rectifying the deficiency. The department does not dispute that the appellant made a double payment. A certificate from the Central Tax Audit Department dated November 3, 2023, confirmed that several DRC-03 forms were taken into account as payment towards a demand raised in the GST Audit Observation dated April 21, 2023. The impugned order of the learned Single Bench, dated April 4, 2024, declined to grant an interim order and directed affidavits to be filed.
Held
The Court held that the appellant is entitled to a refund of the excess amount paid, as the department does not dispute the fact of double payment. The only issue raised was a technical deficiency concerning the re-credit of the refund amount to the ITC ledger, which is not permissible by the system. The Court reasoned that when the fact of double payment is not disputed, the appellant should be refunded the excess amount. The Court directed the appellant to file a fresh refund application in the appropriate form under the 'other refund category'. Upon receipt, the authorities are directed to accept the application and refund the excess tax paid/recovered by the appellant within three weeks from the date of filing the application. The appeal and writ petition are disposed of accordingly.
Key Issues
1. Whether the appellant is entitled to a refund of the excess tax paid, considering the technical deficiency in the refund process related to the ITC ledger? The appellant contended that the department does not dispute the fact of double payment. The sole impediment to the refund appears to be a technical issue with the system not permitting re-credit to the ITC ledger. The appellant relies on the certificate from the Central Tax Audit Department confirming the payments made. The revenue authorities did not dispute the fact of double payment and acknowledged the technical deficiency in the system.
Sections Cited
DRC-03
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Cause title — parties, addresses and appearances
and order.
The order impugned in this appeal is dated 4th April, 2024 by which the learned Single Bench declined to grant any interim order and directed affidavits to be filed.
The short issue involved in this appeal is whether the appellant is entitled for refund.
This aspect has not been disputed by the department and the only ground in which the deficiency memo was issued on the ground that “re- credit of refund amount to ITC ledger not permitted by system”. In the deficiency memo dated 22.11.2023 the appellant has been advised to file a fresh refund
application after rectification of the deficiency is pointed out.
As mentioned earlier the department does not dispute the fact that double payment has been made by the appellant.
In this regard, the learned advocate for the appellant has drawn our attention to a certificate given by the Central Tax Audit Department dated 03.11.2023 by which the appellant has been intimated regarding the several DRC-03’s have been taken into account as payment made towards demand raised in the GST Audit Observation dated 21.04.2023. 7. Thus, when the department does not dispute the fact that double payment has been made by the appellant, the appellant would be entitled for refund of the excess amount paid. The only technical deficiency appears to be that re-credit of refund amount to ITC ledger is not permissible in the computer system.
In the light of the above facts, the appellant is directed to file a fresh refund application in the appropriate form and on receipt of the same the authorities shall accept the application and refund the excess tax paid/recovered by the appellant within a period of three weeks from date on which the application is filed. This application should be processed under the “other refund category”. 2
Accordingly, the writ petition and the appeal stand disposed of.
(T. S. SIVAGNANAM) CHIEF JUSTICE
(HIRANMAY BHATTACHARYYA, J.) 3
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.