No Refund of Tax Paid Through Cash Ledger if ITC Was Blocked Due to Mismatch in Returns | HC

Case Details: Sterlite Power Transmission Ltd. v. Additional Commissioner (Appeals), CGST, Central Excise and Customs - [2025] 170 taxmann.com 356 (TRIPURA)

Judiciary and Counsel Details

• Aparesh Kumar Singh, CJ, & Biswajit Palit, J.
• Anil Kr. Bezawada & S. Mahajan, Advs. for the Petitioner.
• Bidyut Majumder, Deputy SGI, Kohinoor N. Bhattacharyya, G.A., Paramartha Datta & Ms P. Chakraborty, Advs. for the Respondent.

Facts of the Case

The petitioner was a registered taxpayer and during the tax period March, 2021, the electronic credit ledger was blocked by the SGST authorities. The department finally unblocked the credit on 07.07.2021. Meanwhile, to discharge the output tax liability, the petitioner made payment of the tax dues for the period March, 2021 through electronic cash ledger and filed refund application as the input tax credit accumulated in the electronic credit ledger for the said period could not be utilized.

The department issued show cause notice as to why refund claimed should not be rejected since there was no provision in law to refund tax amount paid against liability and the refund claim was rejected as per Circular No.125/44/2019-GST, dated 18-11-2019. The petitioner filed appeal but the same was rejected. Thereafter, it filed writ petition for refund of unutilized ITC.

High Court Held

The Honorable High Court noted that the petitioner has not undertaken business since March, 2021 and therefore the accumulated ITC remains in his electronic credit ledger. In that case, the claim for refund is not made out in terms of Section 54(3) of the CGST Act as none of the enumerated conditions are made out. Therefore, it was held that there was no illegality in impugned order and the petition was dismissed.