Mohanraj.P vs. The Secretary

Facts

The petitioner, P. Mohanraj, was the successful bidder for the weekly market in Nilakottai Selection Grade Town Panchayat for the period July 15, 2019, to July 14, 2020. He remitted a total of Rs. 54,43,340/- towards the lease amount and 18% GST (Rs. 46,13,000/- + Rs. 8,30,340/-). Due to the COVID-19 pandemic lockdown, the market was closed from March 22, 2020, to July 14, 2020 (17 weeks). The petitioner sought a refund of the proportionate lease and GST amounts for this period. The fifth respondent initially refunded Rs. 7,68,832/- based on a Government Order, but denied refund for the remaining period. Subsequently, another sum of Rs. 5,58,023/- was refunded. The petitioner's grievance persisted regarding the proportionate GST amount of Rs. 4,52,698/- for the 17 weeks, which he claimed was not deposited by the fifth respondent and thus he could not claim input tax credit.

Held

The Court held that the GST amount paid by the petitioner cannot be retained by the fifth respondent. The fifth respondent had a duty to pay or deposit this amount, as it did not belong to them. If the fifth respondent failed to deposit the GST amount, they are necessarily obligated to refund it to the petitioner. This is because the petitioner is entitled to claim input tax credit for the GST paid. Since the amount of Rs. 4,52,698/- was not paid or deposited by the fifth respondent, the petitioner is unable to take credit for it, and thus is seeking a refund. The Court directed the fifth respondent to refund the GST amount of Rs. 4,52,698/- to the petitioner, which corresponds to the 17 weeks of market closure. Alternatively, the fifth respondent was directed to deposit this amount before the concerned authority so that the petitioner can claim the input tax credit. This process was to be completed by the fourth respondent within four weeks from the date of receipt of the order, provided the GST amount had not been paid/deposited by the fifth respondent.

Key Issues

1. Whether the petitioner is entitled to a refund of the proportionate GST amount of Rs. 4,52,698/- for the 17 weeks during which the weekly market was closed due to the pandemic lockdown? Petitioner's argument: The petitioner contended that he had remitted the entire GST amount at 18% to the fifth respondent, and this amount was not deposited by the respondent. Therefore, the petitioner is entitled to the proportionate GST amount for the 17 weeks, amounting to Rs. 4,52,698/-, as he is unable to claim input tax credit for this un-deposited amount. Respondents' argument: The learned Special Government Pleader for respondents 1 to 4 submitted that there is no scope for refund of the GST amount paid by the petitioner. They stated that whatever lease amount the petitioner was entitled to has already been refunded.