J K Cement Works vs. Commissioner Central Goods And Services Tax And Another

Facts

The petitioner, J K Cement Works, a company manufacturing cement, approached the High Court of Punjab and Haryana with a grievance that an order granting them a refund was passed on 29.09.2022, but the refund amount had not been credited to their account even after nearly four years. The Revenue, represented by the Commissioner Central Goods and Services Tax and another, stated that an appeal had been filed against the refund order. The Revenue further submitted that a further appeal under Section 112 of the Central Goods and Services Tax Act, 2017, had been preferred before the Tribunal, and this was the reason for not crediting the refund. It was noted that while the petitioner's appeal was allowed in 2022, the appeal before the Tribunal was presented much later, on 27.03.2026, with no hearing date fixed.

Held

The Court held that the Revenue could not deny the refund amount to the petitioner solely because an appeal had been preferred by the Revenue before the Appellate Tribunal. The Court reasoned that the petitioner, being a company engaged in manufacturing and not a 'fly-by-night operator', should not be deprived of the sanctioned refund. The Court directed the Revenue to release the refund amount to the petitioner upon the petitioner furnishing an undertaking. This undertaking would stipulate that if the department's appeal is ultimately accepted and any liability is worked out against the petitioner, the same would be duly deposited in accordance with law. The refund was to be released within six weeks of the furnishing of the undertaking and a certified copy of the Court's order. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the Revenue can deny the credit of a refund amount to the petitioner solely on the ground that an appeal has been preferred by the Revenue before the Appellate Tribunal, when the petitioner's claim for refund was allowed in 2022? Petitioner's Contention: The petitioner argued that despite an order in their favour for a refund passed in 2022, the amount had not been released for nearly four years. They implicitly argued that the pendency of the Revenue's appeal should not indefinitely hold back the sanctioned refund. Revenue's Contention: The Revenue contended that an appeal had been filed against the order allowing the refund, and a further appeal under Section 112 of the CGST Act, 2017, had been preferred before the Tribunal. They stated that this pending appeal was the reason for not crediting the refund amount to the petitioner's account.