M/S Zenith Forgings Private Limited And Another vs. Union Of INDIA And Ors.

Facts

The petitioners, M/s. Zenith Forgings Private Limited & Anr., filed a writ petition before the High Court of Calcutta, being WPA 18295 of 2021. They are aggrieved by the inaction of the respondent Customs Authority in refunding an admitted refundable amount. The petitioners claim that despite making several representations, with the last one dated August 23, 2021, no action has been taken for over four years. The respondent's stated reason for non-consideration of the refund is a discrepancy between the petitioners' GST number and PAN number in the system. However, the petitioners point out that the respondents are processing other transactions with them, implying the issue is specific to the refund claim.

Held

The Court held that the respondent Customs Authority's inaction in processing the admitted refund claim was not in accordance with law. While the respondent cited a technical issue with the GST and PAN number tallying in the system as the reason for non-consideration, the Court found this insufficient to justify the prolonged delay of over four years. The Court directed the Deputy/Assistant Commissioner of Customs (Respondent No. 4) to consider and dispose of the petitioners' representation dated August 23, 2021. This disposal must be done by passing a reasoned and speaking order after providing an opportunity of hearing to the petitioners. If the respondent finds the refund claim to be admitted, expeditious steps should be taken, preferably within four weeks of making that decision, to refund the amount by rectifying the technical difficulties in the system. The Court disposed of the writ petition at the motion stage, deeming the allegations denied by the respondents.

Key Issues

1. Whether the respondent Customs Authority's inaction in refunding the admitted refundable amount, despite the petitioners' repeated representations over four years, constitutes a failure to act in accordance with law? The petitioners argued that the respondent's refusal to process the refund based on a technical discrepancy in the GST and PAN numbers is unjustified, especially since other transactions are being processed. They contended that the respondent's inaction amounts to a failure to consider their legitimate claim. The revenue/respondent did not record any specific arguments against the petitioners' claim of inaction, as the matter was disposed of at the motion stage without calling for affidavits. The respondent's plea for non-consideration was based on the alleged tallying issue of GST and PAN numbers.