2025 (4) TMI 1383 - HC - GST

Direction to transfer the amount to the account of the Petitioner or the 1st Respondent and the Petitioner/1st Respondent who receive the amount to deposit the said amount in GST account through form GST DRC-03 - HELD THAT - The Applicant (Org. Respondent No. 2) has addressed letters to the concerned Pay Accounts Officer (PAOs) and E-PAOs seeking bank account details. In response thereto the PAOs and E-PAOs communicated their inability to get the GST amount transferred to any designated Bank Account because collection of GST amount is only through generation of challan in the common portal and cannot be deposited in any account maintained by the Government Departments other than GST Authorities. Prima facie the prayer of the Applicant to direct the Registry to transfer the amount of Rs. 38, 94, 868/- to the account of the Petitioner- Wellwisher Properties is satisfied and in turn the said Petitioner shall deposit the said amount in GST account through form GST DRC-03. The Registry is hereby directed to transfer the amount of Rs. 38, 94, 868/- to the account of the Petitioner- Wellwisher Properties and after receipt of the said amount the Petitioner- Wellwisher Properties is directed to deposit the said amount with GST Authorities.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter are:

(a) Whether the amount of Rs. 38,94,868/- received by the Khopoli Municipal Council, which pertains to Goods and Services Tax (GST), should be transferred to the Petitioner or the 1st Respondent for subsequent deposit with the GST Authorities;

(b) Whether the Registry of the Court can be directed to transfer the said amount to the Petitioner's account;

(c) The procedural and legal propriety of depositing the GST amount with the GST Authorities, given the constraints communicated by the Pay & Accounts Officers (PAOs) and E-PAOs regarding the non-transferability of GST funds to any government department account other than the designated GST Authorities' accounts;

(d) The appropriate interim relief to be granted in respect of the above issues.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a) and (b): Transfer of GST Amount to Petitioner or 1st Respondent and Role of Registry

Relevant Legal Framework and Precedents: The matter pertains to the deposit of GST amounts under the Central Goods and Services Tax (CGST) Act and the Maharashtra State Goods and Services Tax (MGST) Act. These statutes prescribe the mechanism and authority for collection and deposit of GST funds. The Court's earlier order in Writ Petition No. 11112 of 2022 had specifically addressed the issue of non-deposit of GST by the Khopoli Municipal Council despite receipt of the amount.

Court's Interpretation and Reasoning: The Court noted that the Khopoli Municipal Council had received the GST amount but failed to deposit it with the GST Authorities, resulting in the Petitioner being unable to avail input credit. The Court observed that the amount should be deposited "in even proportion as per the requirement of the Central Goods and Services Tax (CGST) Act and also the Maharashtra State Goods and Services Tax (MGST) Act."

The Court further considered the Applicant's request to direct the Registry to transfer the amount to the Petitioner's account, enabling the Petitioner to deposit the amount directly with the GST Authorities. This was prompted by the inability of the PAOs and E-PAOs to transfer the amount to any government account other than the GST Authorities' designated accounts.

Key Evidence and Findings: The Court relied on the communication from the PAOs and E-PAOs stating the procedural impossibility of transferring GST funds to any government department account other than the GST Authorities' accounts. The demand draft of Rs. 38,94,868/- deposited in Court by the Khopoli Municipal Council was also a critical fact.

Application of Law to Facts: Given the statutory framework and practical constraints, the Court found it appropriate to direct the Registry to transfer the amount to the Petitioner's account. The Petitioner, being the party entitled to the GST input credit, was then directed to deposit the amount with the GST Authorities through the prescribed form GST DRC-03.

Treatment of Competing Arguments: While the Khopoli Municipal Council had deposited the amount with the Court, it had failed to deposit the same with the GST Authorities. The PAOs and E-PAOs' inability to transfer the amount to any government account other than the GST Authorities' accounts was a decisive factor. The Court did not entertain any contrary submissions that would delay or prevent the deposit with GST Authorities, emphasizing the statutory obligation and the Petitioner's entitlement to input credit.

Conclusions: The Court concluded that the Registry should transfer the amount to the Petitioner's account, who would then ensure deposit with the GST Authorities, thereby fulfilling the statutory requirement and enabling the Petitioner to claim input credit.

Issue (c): Procedural Constraints on Deposit of GST Amount

Relevant Legal Framework and Precedents: The CGST and MGST Acts provide for the collection of GST through a common portal and mandate that GST amounts be deposited only through designated channels using prescribed challans.

Court's Interpretation and Reasoning: The Court acknowledged the procedural constraints communicated by the PAOs and E-PAOs, who stated that GST amounts cannot be transferred to any government department accounts other than those maintained by GST Authorities. This procedural limitation reinforced the necessity of the Petitioner depositing the amount directly with the GST Authorities.

Key Evidence and Findings: The letters from the PAOs and E-PAOs were relied upon as evidence of the procedural impossibility of transferring the amount to any account other than the GST Authorities' accounts.

Application of Law to Facts: The Court applied the statutory scheme and administrative practice to hold that the only feasible and lawful method to deposit the GST amount was through the Petitioner using the GST DRC-03 form.

Treatment of Competing Arguments: No alternative procedural mechanism was found or suggested that would comply with the CGST and MGST Acts' requirements. The Court did not entertain any argument that would contravene the statutory deposit mechanism.

Conclusions: The Court accepted the procedural limitation and accordingly structured the relief to ensure compliance with the statutory deposit process.

Issue (d): Grant of Interim Relief

Relevant Legal Framework and Precedents: The Court's power to grant interim relief is governed by principles of equity, justice, and statutory mandates ensuring that parties are not prejudiced pending final adjudication.

Court's Interpretation and Reasoning: The Court was satisfied with the Applicant's prayer for interim relief directing the Registry to transfer the amount to the Petitioner's account. This interim relief was necessary to prevent further delay in depositing the GST amount with the Authorities and to enable the Petitioner to avail input credit.

Key Evidence and Findings: The Court relied on the earlier order in the writ petition and the current application, as well as the communications from government officers, to justify the interim relief.

Application of Law to Facts: The Court applied its inherent jurisdiction to grant interim relief in the form of directing the Registry to transfer funds to the Petitioner's account, subject to the Petitioner's obligation to deposit the amount with the GST Authorities.

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