2023 (11) TMI 353 - HC - GST

Rejection of refund claim - refund denied on the ground that the Department is in the process of filing an appeal against the order of the Appellate Authority - HELD THAT - Inspite of the fact that the order was never appealed against and a period of more than 1 year 4 months have almost gone by, the State has chosen not to refund the amount while passing the impugned order. The writ petition first came up for hearing on 03.07.2023 and an opportunity was given to the State to submit whether an appeal had been filed or not. More time was taken on 21.07.2023 and 29.09.2023 and proceedings had been deferred. However, the appeal has still not been filed. In such circumstances, it is clear that the State is only dilly-delaying on the issue and merely on account of the fact that the State is in the process of filing an appeal, we do not feel that the State is justified in divesting the petitioner of his fruits of litigation which have accrued to him despite a period of 1 year 3 months having gone by. The State is directed to refund the amount due within 2 weeks from the receipt of certified copy of this order - petition allowed.

Summary

Issues involved:
The issues involved in the judgment are the refusal of refund by the State Tax Officer pending an appeal, delay in filing the appeal by the State, and the petitioner's right to receive the refund.

Refusal of Refund Pending Appeal:
The writ petition was filed under Article 226/227 of the Constitution of India to quash the order dated 28.04.2023, where the State Tax Officer declined the refund of Rs. 8,80,992 on the grounds of an appeal being filed against the previous order. The Deputy Commissioner of State Tax had earlier allowed the appeal against the order that imposed a tax penalty and fine. Despite no appeal being filed against this decision for over a year, the State had not refunded the amount, leading to the accusation of delaying tactics by the State.

Delay in Filing Appeal:
The State had been given multiple opportunities to confirm whether an appeal had been filed or not, but as of the latest hearing, the appeal had still not been filed. The court observed that the State's delay in filing the appeal was unjustified, especially considering that over a year had passed since the original order was issued. The court concluded that the State was merely prolonging the issue without valid reasons.

Petitioner's Right to Refund:
In light of the State's delay and lack of justification for withholding the refund, the court quashed the order declining the refund and directed the State to refund the amount due within two weeks. The court emphasized that this direction did not prevent the State from recovering the amount in case a future order favored the State. The writ petition was allowed in favor of the petitioner, ensuring the rightful refund of the disputed amount.