Anil Kumar Trehan (Legal Name) (Trade Name Power Enterprises A Proprietorship Concern vs. The State Of Madhya Pradesh

Held

The Court held that the impugned order dated 03.10.2022 passed by the Assistant Commissioner of State Tax, Bhopal, is not sustainable. The Court found that there was no dispute regarding the petitioner's entitlement to the refund, as previously established by the Appellate Authority's order dated 04.07.2022. The Court reasoned that the respondents cannot deny the refund simply because they lack a procedure to extract the amount from the Consumer Welfare Fund. If no such provision exists, the respondents are obligated to devise a mechanism for this purpose. The Court set aside the impugned order and directed the proper officer to forthwith comply with the appellate authority's order and refund the amount to the petitioner along with statutory interest. The issue of whether the Consumer Welfare Fund itself is a valid destination for such refunds was not expressly decided.

Facts

The petitioner, Anil Kumar Trehan (Power Enterprises), sought a refund of Rs. 6,98,489/-. Initially, the refund was directed to be credited to the Consumer Welfare Fund. The petitioner appealed this decision, and the Appellate Authority, by order dated 04.07.2022, directed that the amount be refunded to the petitioner. However, when the petitioner applied for the refund again, the Assistant Commissioner of State Tax, Bhopal, rejected the application on 03.10.2022, citing a lack of guidelines to extract funds from the Consumer Welfare Fund and pay them to the assessee. The Assistant Commissioner also filed an affidavit stating that there is no provision for extracting such refunds. The petitioner has challenged this rejection order before the High Court.

Key Issues

1. Whether the impugned order dated 03.10.2022 passed by the Assistant Commissioner of State Tax, Bhopal, rejecting the refund application, is sustainable in light of the Appellate Authority's order dated 04.07.2022, which directed the refund to the petitioner, and in light of Section 54(5) of the CGST Act? Petitioner's contention: The petitioner argued that the Appellate Authority had already determined their entitlement to the refund. The rejection by the Assistant Commissioner, solely on the ground of lacking a mechanism to extract funds from the Consumer Welfare Fund, is unsustainable and arbitrary. The respondents cannot deny the refund due to their internal procedural deficiencies. Revenue's contention: The learned counsel for the respondents submitted that if the petitioner were to apply for refund again, the same would be considered and granted by the proper officer. The judgment does not record any further arguments or reliance on specific provisions or precedents by the revenue.