Dharam Pal And Company vs. State Of Haryana And Another

Facts

The petitioner, Dharam Pal and Co., sought a refund of Rs. 17,13,105/- along with interest, which was deducted from their running bills. The petitioner contended that this deduction was made illegally towards sales tax, despite GST already having been deducted from the same bills. The respondents, State of Haryana and another, filed a written statement averring that the deduction was made in accordance with guidelines issued by the Department of Revenue, Ministry of Finance, Government of India, regarding tax deduction at source (TDS) under GST, dated 14.09.2018. These guidelines were stated to be effective from 01.10.2018. The respondents argued that prior to this date, sales tax was deducted at source as per the guidelines, and any GST deposit by the petitioner could not be attributed as a lapse on the department's part. The petitioner was advised to seek recourse for excess deposits and input credit before the competent forum.

Held

The Court did not make a definitive finding on the legality of the deduction. Faced with the respondents' submission that the deduction was made in accordance with the guidelines and that the petitioner had alternative remedies, the learned counsel for the petitioner chose not to press the petition at that stage. The petitioner was granted liberty to pursue alternative remedies available in accordance with law to seek the benefit or refund of the amount claimed to have been deposited in excess of their liability. The Court disposed of the petition as 'not pressed' with the aforesaid liberty. No specific provision of the CGST Act or SGST Act was discussed in detail to arrive at a finding, as the matter was resolved based on the petitioner's decision not to press the petition.

Key Issues

1. Whether the deduction of Rs. 17,13,105/- towards sales tax from the petitioner's running bills was illegal, notwithstanding the deduction of GST from the same bills, in light of the effective date of GST provisions? Petitioner's contention: The petitioner argued that the deduction of sales tax was illegal because GST had already been deducted from the bills. They sought the refund of the amount deducted as sales tax. Respondents' contention: The respondents contended that the deduction was made in accordance with the guidelines issued by the Department of Revenue, Ministry of Finance, Government of India, regarding TDS under GST, dated 14.09.2018. They asserted that prior to 01.10.2018, sales tax was being deducted at source as per these guidelines, and the petitioner's own deposit of GST did not constitute a departmental lapse. They suggested the petitioner pursue alternative remedies for excess deposits and input credit.