Landmark Judgment by Gujarat High Court: Refund of Excess Tax with Interest

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Landmark Judgment by the Gujarat High Court allowing Refund of excess Tax deposited (15% - 2% = 13%) for non-receipt of Form C along with Interest deposited. Case verdict: In favour of Assessee Compiled by: Raja Abhishek, NIRC Candidate 2024 #GST #CSTRefund #TaxpayerRights

Facts of the Case: • 01.07.2017 - 15.03.2018: Assessee, engaged in providing, processing, and packaging solutions, purchased natural gas from Bharat Petroleum Corporation Limited (BPCL). Due to legal ambiguity, CST was paid 15% instead of 2%.

• Post 15.03.2018 - 31.03.2019: BPCL charged CST at 2% anticipating C-Form declarations. • 2018: Supreme Court in Carpo Power Limited v State of Haryana confirmed purchase against C-Form post-GST. • 01.11.2018: Circular issued clarifying C-Form issuance for petroleum products.

• 2022: Maharashtra restored Assessee’s CST registration based on Ramco Cements Ltd. ruling. • Post-2022: Maharashtra issued C-Forms for 2017-18 and 2018-19. • 2023: Arbitration awarded Assessee liable for reimbursing BPCL for interest on differential tax.

Issue ❓ • Whether the Assessee is entitled to a refund of excess tax paid (15% instead of 2%) along with interest.

Argument by the Assessee 💼 • The Assessee argued that despite being eligible for a concessional CST rate of 2% with C-Forms, they paid 15% due to initial legal confusion. • Refund claimed of ₹3,94,46,741 along with interest of ₹1,13,86,862 paid by BPCL.

Department's Argument 🏛️ • The Department acknowledged the Assessee's entitlement to a refund but contended that it should be processed through the seller, BPCL.

Precedent Analysis 📚 • Carpo Power Limited v. State of Haryana: Affirmed by the Supreme Court, allowed purchase against C-Form post-GST. • Ramco Cements Ltd.: Reaffirmed the Carpo Power decision.

• J.K. Cement Ltd. v. State of Gujarat: Established buyer's entitlement to a refund in similar circumstances.

Court Judgment ⚖️ • The Court ruled in favor of the Assessee, directing the Department to process the refund of the excess tax amount and interest paid by BPCL. The Court emphasized compliance within twelve weeks from the receipt of the order.

Title: Tetra Pak India Pvt Ltd Vs State of Gujarat Court: Gujarat High Court Citation: R/SPECIAL CIVIL APPLICATION NO. 20272 of 2023 Dated: 14-Jun-2024

Impact Analysis of this Judgment 🌐 • The judgment reinforces the buyer's right to refunds for excess tax paid, promoting fair tax practices post-GST transition.