Department is Directed to Process Second Refund Application as Rejection Would Amount to Unjust Enrichment From Excess Tax Collected | HC

Case Details: ABN Industries vs. Union of India - [2025] 172 taxmann.com 822 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & D.N. Ray, JJ.
• Hardik V Vora for the Petitioner.
• Ms Hetvi H Sancheti for the Respondent.

Facts of the Case

The petitioner supplied goods to Special Economic Zone (SEZ) Units without paying taxes. It filed refund application and the refund of ITC was approved. However, it made an error in claiming ITC as certain purchase bills were unintentionally omitted during refund calculation. Therefore, it submitted another refund application and a show cause notice was issued proposing to reject refund application. It submitted reply but refund claim was rejected in view of Circular No. 125/44/2019-GST dated 18-11-2019. It filed appeal but the same was rejected. It filed writ petition against the rejection of refund claim.

High Court Held

The Honorable High Court noted that the department rejected refund claim on the ground that it was not permissible under Circular No. 125/44/2019-GST dated 18-11-2019. However, the Court noted that once the quantum of refund was admitted by department, failure to do so would tantamount to unjust enrichment on part of department to excess tax collected from assessee, which it did not have authority. Therefore, the Court held that the department was to be directed to process refund application of assessee.

List of Cases Referred to

• Shree Renuka Sugars Ltd. v. State of Gujarat [2023] 152 taxmann.com 550/100 GST 159/78 GSTL 324 (Gujarat) (para 8).