Refund can’t be denied even if investigation is pending against the assessee: Bombay HC

Case details: Evertime Overseas (P.) Ltd. v. Union of India - [2021] 133 taxmann.com 21 (Bombay)

Judiciary and Counsel Details

• • Dipankar Datta, CJ. and M.S Karnik, J.
  • Prithwiraj Choudhuri for the Petitioner.
  • Ashutosh Misra, Jitendra Mishra and Satyaprakash Sharma for the Respondent.

Facts of the Case

The petitioner filed refund application but the application was rejected. The department submitted that claim for refund would not be processed on the ground that the investigation was pending against the petitioner. The petitioner filed writ petition and claimed that he was entitled to refund under the provisions of section 16 of the IGST Act.

High Court Held

The Honorable High Court observed that as per sub-section 10 of section 54 of the CGST Act, the proper officer can withhold payment of refund if registered person has defaulted in furnishing any return or required to pay any tax, interest or penalty. However, application to process the refund would not be rejected or kept on hold on the ground that the investigation was pending. Thus, in the present case, the department was directed to process the application made by the petitioner for refund and pass a reasoned order upon hearing the petitioner.