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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G. S. Kulkarni, Firdosh P. Pooniwalla, JJ.
Shri Yogesh Rajendra Mehra – Petitioner
Versus
Principal Commissioner CGST & Central Excise and ors. – Respondents
Writ Petition No. 1632 of 2024
Decided On : 20-02-2024
Refund - Goods and Service Tax - Central Goods & Services Tax Act, 2017 - Section 54, Section 107 - The court discussed the inadvertent error in filing returns and depositing tax under a cancelled registration number and a new registration number. The court highlighted the legal position that tax deposited under the cancelled registration could not be retained as it was not a valid deposit as per law. The court also emphasized that any deficiency in filing the appeal within the prescribed limitation could be rectified later, and procedural compliances cannot defeat the substantive remedy/right to pursue any proceedings when filed within limitation.
Fact of the Case:
The petitioner, a scriptwriter, filed GST returns under both old and new registration numbers, leading to a refund application rejection. The petitioner sought relief through a writ petition.
Finding of the Court:
The court found that the petitioner's inadvertent error in filing returns and depositing tax under a cancelled registration number and a new registration number warranted a refund. The court also held that any deficiency in filing the appeal within the prescribed limitation could be rectified later, and procedural compliances cannot defeat the substantive remedy/right to pursue any proceedings when filed within limitation.
Issues: Inadvertent error in filing returns and depositing tax, rejection of refund application, limitation for filing the appeal
Ratio Decidendi: Tax deposited under the cancelled registration could not be retained as it was not a valid deposit as per law. Any deficiency in filing the appeal within the prescribed limitation could be rectified later, and procedural compliances cannot defeat the substantive remedy/right to pursue any proceedings when filed within limitation.
Final Decision: The impugned orders were quashed and set aside, and the petitioner was entitled to a refund of the amounts deposited under the erroneous return filed under the cancelled registration number. The court ordered the refund along with permissible interest to be made within four weeks.
JUDGMENT :
G. S. KULKARNI, J.
1. Rule. Rule made returnable forthwith.
2. Heard finally by consent of the parties.
3. This Petition under Article 226 of the Constitution of India is filed assailing an order dated 28th December 2022, being an Order in Appeal passed by the Commissioner of Central Tax, Central Excise & Service Tax, Raigad (Appeals), whereby the Petitioner’s appeal against the Order dated 8th June 2022 passed by the Assistant Commissioner, CGST and Central Excise, Division-I, Navi Mumbai, Commissionerate under section 54 of the Central Goods & Services Tax Act, 2017 (“CGST Act”) has been rejected.
4. The Petitioner has contended that inadvertently, the Petitioner had filed his Goods and Service Tax returns under his old GST registration number as well as under new GST registration number, as also deposited tax with both the returns. It is the petitioner’s case that the Petitioner, therefore, had become entitled to refund of the amount of tax deposited by him on the cancelled (old) registration. The petitioner filed a refund application which was rejected. The rejection was confirmed in the further proceedings. In these circumstances, the Petitioner is before the Court praying for the following reliefs:
b. This Hon'ble Court be pleased to issue a Writ in the nature of Mandamus or any other appropriate Writ, Order or direction calling for the records and proceeding of the entire proceedings before Additional Commissioner CGST & CENTRAL EXCISE Raigad (appeals) from the Respondent Nos. 1 & 3, and/or;
c. The Hon'ble Court be pleased to issue a Writ in the nature of Mandamus or any other Writ, Order or Directions to set aside impugned Order dated 27th February 2023 passed by the Respondent No. 3 and/or;
d. The Hon'ble Court be pleased to restore the appeal No. -JSC/ADC/GST/325/RGD APP/2022-23 to the file of the Respondent No. 3 and thereby direct the Respondent No. 3 to pass appropriate Orders on merits for refund of Rs. 1,22,000/- (Rupees One Lacs Twenty Two Thousand Only) which was mistakenly transferred to old GST No. 27AQEPM6029P1ZA from the Account of the Petitioner and/or;
e. This Hon'ble Court be pleased to pass Orders Directing the Respondents Nos. to 1 3 their officers/agents/Thousand Only) to the Petitioner Account which was mistakenly transferred to old GST No. 27AQEPM6029P1ZA from the Bank Account of the Petitioner, and/or;
f. The Hon'ble Court be pleased to pass any other such Order's that this Hon'ble Court deem fit and proper.
g. The Hon'ble Court be pleased to allow the Petitioner to Amend, modify the Writ Petition.”
5. Briefly, the facts are : The Petitioner contends that he is a script writer who takes up assignment on contract basis. He had applied for registration under the CGST Act, 2017. Registration Certificate bearing Registration Number : 27AQEPM6029PIZA was granted to him on 19th July 2018. The Petitioner had filed his return under the CGST Act on 2nd December 2018 and thereafter, no returns were filed. By an order dated 1st January 2019, the said registration of the Petitioner was cancelled and hence, was rendered inconsequential.
6. The case of the Petitioner is that, thereafter, the Petitioner had started his professional activities and made an application for a fresh registration which came to be granted to the Petitioner on 26th March 2022 with a new registration number : 27AQEPM6029P2Z9. It is contended that, for the first quarter of year 2022, two returns came to be filed by his Chartered Accountant who inadvertently, deposited a tax of Rs.1,22,220/- in the cancelled registration number (Old GST Account) being 27AQEPM6029PIZA, as also under the new registration number being 27AQEPM6029P2Z9, when in fact, t
No bar under Section 54(1) CGST Act on second refund application for inadvertently omitted invoice within prior quarterly period if filed within two-year limitation; technical rejections invalid, mat....
The Court emphasized the right to seek revocation of GST registration cancellation, highlighting the need for fairness in circumstances obstructing compliance due to health issues.
The main legal point established in the judgment is the principle of unjust enrichment and the applicability of Section 54 of the CGST Act in claiming refunds under the GST regime.
Voluntary payments made under a mistake are not subject to the limitation period for refund claims under Section 54(1) of the GST Act.
The court established that the limitation period for refund applications under the CGST Act is determined by the original filing date, not subsequent deficiencies.
The court ruled that the denial of a tax refund on grounds of limitation was wrong, emphasizing the principle of unjust enrichment, and clarified that the time limit of two years for refund applicati....
The importance of providing detailed reasons for cancellation of registration and the need for compliance with the principles of natural justice.
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