Agrawal And Brothers Thr. Om Prakash Agrawal vs. Union Of INDIA Western Railway Division Drm Office Ratlam

Held

The Court held that the petitioner is entitled to a refund of Rs. 13,38,544/-. The reasoning was based on the admitted mistake of Respondent No.1 in depositing the GST amount under the wrong GSTIN. The Court emphasized the principle that no one should suffer for the fault of another. Since the initial deposit by Respondent No.1 was not reflected in the petitioner's account due to this error, the petitioner was compelled to pay the GST and interest again to avoid the cancellation of their GSTIN. Therefore, the petitioner is entitled to recover this amount from Respondent No.1. The Court directed Respondent No.1 to refund the amount within two months. Respondent No.1 was granted liberty to file a claim before the GST department for the amount paid by the petitioner, and the competent authority of Respondent No.2 was directed to decide such a claim in accordance with the law. The Court also imposed costs of Rs. 10,000 on Respondent No.1 in favor of the petitioner.

Facts

The petitioner, Agrawal and Brothers, participated in an e-auction by Respondent No.1 (Union of India, Western Railway) on August 12, 2017, for iron and steel scrap. The petitioner was the highest bidder and purchased scrap for Rs. 51,97,142, including GST of Rs. 9,35,486. The petitioner claimed Input Tax Credit (ITC) for this amount. However, Respondent No.1 failed to report the auction sale invoice in its GSTR-1 return, causing the invoice not to reflect in the petitioner's GSTR-2A. Consequently, Respondent No.2 (CGST and Central Excise) issued a demand notice for the input tax. To avoid GSTIN cancellation, the petitioner paid Rs. 13,38,545 (including interest) under protest. Respondent No.1 admitted that it inadvertently deposited the GST amount under the wrong GSTIN. The petitioner sought the return of the paid amount from Respondent No.1.

Key Issues

1. Whether the petitioner is entitled to a refund of Rs. 13,38,544 paid under protest due to the erroneous deposit of GST by Respondent No.1. Petitioner's Arguments: The petitioner argued that they are not liable to suffer for the mistake of Respondent No.1, which inadvertently deposited the GST amount under an incorrect GSTIN. They paid the GST again to avoid cancellation of their GSTIN and therefore are entitled to a refund of the amount paid under protest. Respondent No.1's Arguments: Respondent No.1 admitted to depositing the GST amount but stated it was done under an incorrect GSTIN (23AAIFA875GIZ1 instead of 23AAIFA8751ZI). They also admitted that the petitioner was the H-1 bidder and paid the consideration. Respondent No.1 requested the GST authorities to refund the amount if received. Respondent No.2's Arguments: Respondent No.2 contended that any ITC availed after October 20, 2019, for FY 2018-19 is recoverable under Section 16(4) of the GST Act. They noted that the petitioner's GSTR-3B and GSTR-2A did not reflect the ITC of Rs. 26,70,414. A final order was passed by the Assistant Commissioner confirming a demand of Rs. 9,34,096 (ITC) with interest, though a larger demand was dropped.