The Calcutta High Court has made a significant ruling in a case involving the Goods and Services Tax (GST) refund. The petitioner, Edelweiss Rural & Corporate Services Limited (Edelweiss), had approached the Court after being aggrieved by contradictory orders issued by the Revenue Department. Edelweiss had previously successfully appealed against a refund rejection order and had filed a new refund application in October 2023. However, the Revenue Department issued a refund sanction order that directed the refund amount to be paid into the company’s Electronic Credit Ledger, despite the fact that the company had ceased its business operations and its registration had been cancelled.
The Court noted that this decision was contradictory to the original sanctioning order, which had stated that the refund amount would be paid to the company’s bank account. The single-judge bench of Justice Raja Basu Chowdhury observed that the petitioners had closed down their business operation and its registration had already been cancelled, and that no tax was due payable by the petitioner. The Court instructed the Deputy Commissioner to reconsider and rectify this contradiction, granting a period of six weeks to make a new determination after providing an opportunity for a hearing to the petitioner.
The Court’s ruling is significant as it highlights the importance of ensuring that GST refund orders are consistent and do not prejudice the taxpayer. The Court’s decision also underscores the need for the Revenue Department to follow proper procedures and provide opportunities for hearing to taxpayers before making decisions that affect their rights. The case is a reminder that taxpayers have the right to approach the Courts to challenge decisions that are contradictory or unjust, and that the Courts will intervene to ensure that justice is served.
The petitioners were represented by Ankit Kanodia, Megha Agarwal, Tulika Roy, and Piyush Khaitan, while the respondents were represented by Anirban Ray, Md. T. M. Siddiqui, Tanoy Chakraborty, and Saptak Sanyal. The Court’s judgment is a victory for Edelweiss, which had been seeking a refund of ₹68,66,238. The case will likely have implications for other taxpayers who are seeking GST refunds and are facing similar challenges. The Court’s ruling is a reminder that the GST regime is still evolving, and that the Courts will play an important role in shaping its development and ensuring that it is fair and just.