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Judgment
(Per Abasaheb D. Shinde, J.) :
By this Writ Petition, filed under Article 226 of the Constitution of India, the petitioner has put forth the following substantive prayer :-
“B) That the order of granting the refund claim as credit in the electronic ledger be modified by directing the respondent no.3 to refund the claim in cash.”
The petitioner contends that it is a proprietary firm engaged in the trading of M.S. Steel Pipes. Being a registered taxpayer holding GSTIN.27ADMPG6327M1Z4, the petitioner regularly files its returns through an electronic portal facility. For the month of April 2018, the petitioner filed GSTR-3B on 19.05.2018. However, due to technical glitches, the same was automatically reset on 26.09.2018. The same was reflected in Electronic Credit Ledger, and the closing balance of Input Tax Credit (ITC) was decreased by an amount of Rs,40,98,933/-.
It is further contended by the petitioner that, inspite of having sufficient balance of ITC, the portal generated the PMT-6 Challan to the tune of Rs.54,88,610/- towards liability for the month of February-2020. The petitioner, therefore, was required to pay the said amount in cash, despite having ITC of Rs.40,98,933/-. The said fact was revealed at the time of filing annual returns for the year 2018-19 and 2019-20, showing the remark on dash board “Your April- 2018 return is not filed
According to the petitioner, despite having sufficient balance of IGST in Electronic Credit Ledger, due to the technical glitches in GST portal, the challan for Rs.54,88,610/- was generated. In short, the contention of the petitioner is that the respondents recovered an excess amount in the sum of Rs.40,98,933/- in cash from the petitioner. The petitioner, therefore, filed an application for refund of the excess amount, which was accordingly allowed. However, the Respondents instead of refunding the said amount in cash, credited the same in Electronic Credit Ledger.
Learned Advocate for the petitioner submits that the respondents ought to have refunded the excess amount in cash in stead of crediting the same in Electronic Credit Ledger, in view of Circular No.135/05/2020-GST dated 31.03.2020 issued by Respondent No.2. He invited out attention to Clause-4.4 of the said circular, which reads thus :-
“4.4The combined effect the abovementioned changes is that any such refund of tax paid on supplies other than zero-rated supplies will now be admissible proportionately in the respective original mode of payment i.e. in cases of refund, where the tax to be refunded has been paid by debiting both electronic cash and credit ledgers (other than the refund of tax paid on zero-rated supplies or deemed export), the refund to be paid in cash and credit shall be calculated in the same proportion in which the cash and credit ledger has been debited for discharging the total tax liability for the relevant period for which application for refund has been filed. Such amount, shall be accordingly paid by issuance of order in FORM GST RFD-06 for amount refundable in cash and FORM GST PMT-03 to re-credit the amount attributable to credit as ITC in the electronic credit ledger.”
He, therefore, urged that the Writ Petition deserves to be allowed.
Learned Counsel appearing for the Respondents strongly opposed the Writ Petition, inter alia, contending that the Writ Petition is misconceived and, therefore, the same deserves to be dismissed.
We have heard the learned Counsel for the petitioner and the learned Counsel appearing for the respondents. Indisputably, the application filed by the petitioner seeking a refund of the excess amount was allowed by Respondent No.3. However, instead of refunding the said amount in cash, Respondent No.3 credited the same to the petitioner’s Electronic Credit Ledger. In the peculiar facts and circumstances of the case, and taking into consideration Clause 4.4 of the said Circular referred to hereinabove, the petitioner is entitled to derive the benefits of the said Circular. We thus find that the Writ Petition deserves to be allowed. Hence, the following order :-
ORDER
Writ Petition is allowed in terms of prayer clause-B.
The respondents shall take appropriate steps within a period of twelve (12) weeks from the date of receipt of copy of this order.