Refund of Wrongly Paid IGST Allowed as Limitation Not Applicable | HC

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refund of wrongly paid IGST

Case Details: Merck Life Science (P.) Ltd. vs. Union of India [2025] 180 taxmann.com 593 (Karnataka)

Judiciary and Counsel Details

  • S.R. Krishna Kumar, J.
  • Bharat B. Raichandani & Raaghul Piraanesh, Advs. for the Petitioner.
  • Smt. Swati Panduranga, Aravind V. Chavan, Smt Swati Purandara & Smt. Swati L. Kamat, Advs. for the Respondent.

Facts of the Case

The petitioner, provided intermediary services to foreign entities and initially discharged IGST, treating the supplies as inter-state/export transactions. Subsequently, the petitioner reassessed the same transactions as intra-State and discharged CGST and SGST liability. It was contended that the refund could not be denied as the liability for the transactions had been duly discharged under CGST and SGST, and that constitutional and legal principles prevented retention of tax without authority of law. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the constitutional mandate under Article 265 of the Constitution of India prohibits the collection or retention of tax without authority of law, and that principles of restitution and prevention of unjust enrichment required a refund of the IGST to the petitioner. The Court observed that limitation provisions under the IGST Act, operate as directory in such circumstances where liability has been discharged through CGST and SGST, and cannot bar the refund. The impugned orders were set aside, and the matter was remitted to the jurisdictional officer.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied