2020 (7) TMI 104 - HC - GST

Court rules in favor of petitioner for refund of excess transitional credit; no interest payment required under Section 50.

The court held in favor of the petitioner, recognizing their entitlement to a refund of the excess amount claimed as transitional credit. The respondent ... Refund of excess amount - transitional credit - HELD THAT:- The respondent vide order dated 24.06.2020 has now categorically accepted that there was excess amount, which is liable to be refunded to the petitioner. The petitioner had also adjusted the same from transitional credit availed by the petitioner towards its tax liability - the question of payment of interest by the petitioner under Section 50 of the said Act, does not arise as the said amount is sought to be refunded. The writ petition is therefore liable to be closed in the light of the subsequent order dated 24.06.2020 of the respondent. Petition disposed off. Issues:Refund of excess amount claimed as transitional credit, adjustment of transitional credit against tax liability, demand for interest under Section 50 of the Act.Refund of Excess Amount Claimed as Transitional Credit:The petitioner filed a writ petition against an order seeking to deny a refund of excess amount of &8377; 13,38,958 claimed as transitional credit. Subsequently, the respondent passed another order recognizing the petitioner's entitlement to the refund. The respondent accepted the existence of the excess amount and its liability to be refunded to the petitioner. The petitioner had already adjusted this amount from the transitional credit towards its tax liability under the Tamil Nadu Goods and Supply Tax Act, 2017.Adjustment of Transitional Credit Against Tax Liability:The petitioner's counsel argued that since the transitional credit now allowed as a refund had already been adjusted by the petitioner, the respondent should give credit and adjust the same to avoid any demand for interest under Section 50 of the Act. The respondent's order dated 24.06.2020 acknowledged the excess amount and the petitioner's adjustment of the same against tax liability, thereby negating the need for the petitioner to pay interest under Section 50.Demand for Interest Under Section 50 of the Act:The issue of demanding interest under Section 50 of the Act does not arise as the excess amount claimed as transitional credit is now recognized as refundable by the respondent. The court held that since the amount is to be refunded, there is no obligation for the petitioner to pay interest. Consequently, the writ petition was disposed of in light of the subsequent order dated 24.06.2020 by the respondent, with no costs imposed and the connected miscellaneous petition closed.