State Marketing Company Ordered to Refund Rs. 9,38,100/- with Interest to Petitioner within Three Months.

The HC ruled in favor of the petitioner, directing the second respondent, a State Marketing Company, to refund the security deposit and advance money totaling Rs. 9,38,100/- with interest from the license expiry date within three months. The court concluded that the respondent cannot retain the amount based on the license terms, dismissing the respondent's GST-related contentions. The Writ Petition was concluded with specified directions and no costs.

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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.

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