Refund w.r.t wrongly paid penalty

[Bruce Reddy]

Suppose, if penalty is paid by the taxpayer based on the verbal demand of the tax authority (eway bill verification related); however the authority doesn't upload the demand in portal nor give any document regarding the demand.

Is the taxpayer eligible for refund of penalty in this scenario? Please shed light.

[Shilpi Jain]

How was the penalty paid? Through banking channel?

If yes, then file a refund application since there is no demand order for such payment. 

[KASTURI SETHI]

(i) Such refund is admissible. Section 54 (8)(e) covers “any other amount”. Govt. cannot retain any amount without any authority of law.

(ii) You will have to prove that you were forced to pay such amount by creating phobia of GST laws which were not contravened by you.

(iii) You can take shelter of the following case laws. Although these case laws pertain to recovery of tax without any authority of law, yet these can be very helpful to you in drafting application for refund claim.

TMI ID : 441712, 234420, 370345

AI Summary

Taxpayer Can Seek Penalty Refund Under GST Act Section 54(8)(e) If Paid Without Official Demand. Prove Coercion. A taxpayer inquired about eligibility for a refund of a penalty paid based on a verbal demand from a tax authority, without any official documentation or portal update. One response suggested filing a refund application if the payment was made through a banking channel, as no demand order exists. Another response confirmed the refund's admissibility under Section 54 (8)(e) of the GST Act, emphasizing that the government cannot retain amounts without legal authority. It was advised to prove coercion in payment and reference relevant case laws to support the refund application.