2024 (7) TMI 455 - HC - Indian Laws

Refund of security deposit money and one month advance money - no justification to retain the amount that was paid by the petitioner at the time of getting licence - HELD THAT - The respondents is merely a State Marketing Company, engaged for selling liquor products in Tamil Nadu. For facilitating further sale of liquor, the petitioner has also licenced licencee to set up bars adjacent to the TASMAC Retail shops maintained by them - In case the petitioner fails to pay tax in time, it is for the Authorities under the respective GST enactments to recover and collect the same from the petitioner in the manner known to law under Section 63 or Section 73 or under Section 74 of the respective GST enactments. In case the petitioner has failed to file Returns or had failed to obtain registration under the provisions of respective GST enactments, the Authorities under the respective GST enactments were empowered to initiate proceedings under Section 63 of respective GST enactments. In this case, it is noticed that the petitioner had obtained registration, which was subsequently cancelled on 09.04.2019. The petitioner has also filed that receipts on the sales during the period. The petitioner may have evaded tax. However, such evasion of tax could not be justify by retention of the security deposit and one month advance paid by the petitioner at the time of granting the licence to the petitioner - The second respondent cannot be retain the amount and exercise a lieu over it, based on the terms in the licence issued to the petitioner. This Writ Petition is allowed by directing the second respondent to refund the amounts collected together with 9% of the interest from the date, when the petitioner s licence expired. The amount shall be paid to the petitioner within a period of three months from the date of receipt of a copy of this order - Petition allowed.

Summary

Issues:
Refund of security deposit and advance money, justification for retaining the amount, GST registration and tax payment obligations, legality of impugned orders.

Analysis:
The petitioner challenged impugned orders dated 04.07.2022 and 27.07.2022 issued by the second respondent regarding the refund of security deposit and advance money. The petitioner sought the refund of Rs. 6,25,400/- and Rs. 3,12,700/- deposited for collecting bottles and selling snacks in a bar attached to a TASMAC shop. The Writ Petition filed by the petitioner was disposed of on 15.07.2022 during which TASMAC rejected the petitioner's request. The court allowed the petitioner to question TASMAC's decision through appropriate legal means. The petitioner claimed to have been a licensee for running a bar but surrendered the license, demanding the return of the security deposit and advance money. The petitioner argued that the GST registration and tax payments made justify the refund, emphasizing that the GST registration was later canceled, and the GST amount determined was nil.

The respondent, through the Standing Counsel, highlighted the conditions in the tender document and license issued to the petitioner, indicating the obligation to pay GST and the consequences of non-payment. The respondent contended that the security deposit was being held for the GST amount payable by the petitioner. The respondent questioned the petitioner's GST payment receipts and calculations, asserting that the petitioner did not pay the full GST amount, leaving TASMAC to bear the burden. The respondent stated that upon receiving the GST payment, the refundable deposit would be paid to the petitioner.

The court considered the arguments from both sides and clarified that the respondent is a State Marketing Company authorized to sell liquor products in Tamil Nadu. The court noted that the petitioner, as a licensee, was required to obtain GST registration and pay taxes regularly. The court highlighted that any tax evasion by the petitioner should be addressed by the appropriate GST authorities under the law. The court ruled in favor of the petitioner, directing the second respondent to refund the amounts with interest from the license expiry date within three months. The court emphasized that the second respondent cannot retain the amount based on the license terms and ordered the refund, concluding the Writ Petition with the specified directions and no costs.