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Taxman can’t keep GST paid by mistake: HC

January 7, 2023

Experts welcomed the ruling and noted that the High Court has found the stringent conditions of GST laws such as mandatory online filing and time limit to be unfair.

In a move that will help assesses, the Andhra Pradesh High Court has said the Goods and Services Tax (GST) department cannot keep the taxes paid by them due to inadvertent error on their part while filing the GST forms. In a recent ruling on a writ petition, a division bench of Justices C Praveen Kumar and AV Ravindra Babu held that amounts that were paid by the taxpayer furnishing incorrect details cannot be taken as tax dues to the department. The department cannot claim that the taxpayer is barred by limitation.

“Viewing from any angle, the respondents cannot retain the disputed amount, that are paid to them, due to inadvertent error,” the Court held, adding that the petitioner is entitled to relief. The Court also directed the taxpayer to apply for a refund of the tax amount he is entitled to in manual form and also directed the GST department to pass an order on the refund within four weeks.

Experts welcomed the ruling and noted that the High Court has found the stringent conditions of GST laws such as mandatory online filing and time limit to be unfair.

“This is a major respite amidst many assesses facing such procedural roadblocks. It would be better for the Central Board of Indirect Taxes and Customs to issue the necessary instructions to its officers to accept manual refund application in such cases,” said Narendra Dave, Partner, Lakshmikumaran & Sridharan Attorney. Compliance of the conditions under the CGST Act, 2017 should not be insisted upon in such cases as this refund claim arises outside the provisions of the Act, he said.

The case related to a taxpayer who is engaged in the business of supplying telecom pipe laying services in Telangana like Vodafone Mobile Services, Kandlakoya Village, Medchal Mandal in Telangana, which has another office located at Mumbai.

The taxpayer supplied the cable laying services at Kandlakoya in Telangana but erroneously issued two tax invoices for this to Vodafone Mobile Services Limited, Mumbai. It also issued two other tax invoices in June, 2018 declaring the IGST liability and also issued a credit note. While keying in the details and returns information in the GST common portal, the GSTIN of Vodafone Mobile Services Limited, Mumbai was inadvertently keyed in instead of the GSTIN of Vodafone Mobile Services Limited, Kandlakoya, Medchal Mandal, Telangana.

After realising this mistake, the taxpayer tried to rectify the mistake in May, 2020 but the GST Common Portal did not permit this as the time available for rectification was only upto October 20, 2019. Then in February 2021, the taxpayer requested the Superintendent of Central GST, Bhimavaram Range to either refund the amount in issue or adjust it with the existing liabilities. The Superintendent asked the taxpayer to follow a 2019 circular which stipulates a time limit of two years from the date of payment of the amount in issue towards IGST.

[The Financial Express]

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