Amount Debited From Electronic Cash and Credit Ledgers Before Expiry of Statutory Period for Filing Appeal to Be Refunded | HC

Case Details: Tvl. Cargotec India (P.) Ltd. v. Assistant Commissioner (ST) - [2024] 162 taxmann.com 83 (Madras)

Judiciary and Counsel Details

• • Senthilkumar Ramamoorthy, J.
  • Ms R. Charulatha, Lakshmi Kumaran & Sridharan Attorneys for the Petitioner.
  • V. Prashanth Kiran, Govt. Adv. for the Respondent.

Facts of the Case

The petitioner was a company and the assessment orders were passed against it. It filed writ petition against the demand and submitted that as per Section 78, no recovery measures shall be undertaken by the GST authorities for a period of three months from the date of such order. However, the recovery proceedings were initiated even prior to the expiry of the three month period and the amounts were debited from the petitioner’s Electronic Cash and Credit Ledgers.

High Court Held

The Honorable High Court noted that proviso to Section 78 could be invoked only if proper officer recorded in writing reason as to why he considers it expedient in interest of revenue to require taxable person to make payment even before expiry of prescribed three month period. In the instant case, no material was placed on record to justify invoking proviso to Section 78 and the department had failed to satisfactorily explain recourse to proviso to Section 78.

Therefore, the Court held that the petitioner would be entitled to refund and the department was directed to either refund recovered amount or re-credit same to petitioner’s Electronic Cash or Credit Ledgers.