2025(06)LCX0369
Britannia Industries Ltd.
Versus
Assistant Commissioner Of Commercial Taxes
WRIT PETITION NO. 33963 OF 2024 decided on 18-06-2025
NC: 2025:KHC:20866
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO. 33963 OF 2024 (T-RES)
BETWEEN:
M/S. BRITANNIA INDUSTRIES LTD.,
SURVEY NO 11,12,16,19,22,23,24 AND 135,
PLOT NO 223, BIDADI INDUSTRIAL AREA,
BALVERNAHALLI, RAMNAGARA - 562109
(REPRESENTED BY SOMSINDHU,
MANAGER TAX LITIGATION
INCORPORATED UNDER THE COMPANIES ACT 1956)
…PETITIONER
(BY SRI. RAVI RAGHAVAN., ADVOCATE)
AND:
1. ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
LGSTO - 155, 3RD FLOOR,
NEW KANDAYABHAVAN,
B M ROAD, RAMANAGARA – 562159.
2. ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
AUDIT - 2.5 DGSTO - 2, 1ST FLOOR,
PIONEER PLAZA,
KENCHENAHALLI MAIN ROAD,
RAJARAJESHWARINAGARA
BENGALURU- 560098.
…RESPONDENTS
(BY SMT. JYOTI M MARADI., HCGP FOR R1 & R2)
THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED REFUND REJECTION ORDER NO. ZD290924004524B DTD. 03.09.2024 PASSED BY THE R-1 IN FORM GST RFD-06 ENCLOSED AT ANNX-A REJECTING THE REFUND APPLICATION FILED BY THE PETITIONER AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
ORAL ORDER
In the caption petition, petitioner is assailing the order of rejection passed by the respondent No.1 thereby declining to refund the interest recovered by the Authority on 12.02.2024.
2. The short point that needs consideration at the hands of this court as to whether the 1st respondent-Assessing Authority could have debited the disputed interest amount pending consideration of the appeal filed by the petitioner herein under Section 107(1) of the Central Goods and Services Act, 2017 (for short 'the Act, 2017').
3. Learned Additional Government Advocate while seriously contesting this petition would place reliance to Section 128(3) of the Act and contend that petitioner has an remedy under the said provision and therefore would justify the rejection of the petitioners claim seeking refund of the disputed interest amount.
4. Having heard the counsels on record, this Court needs to examine as to "whether the Assessing Authority could have debited the disputed interest amount contrary to Section 107(7) of Central Goods Service Tax Act, 2017 (for short ‘Act’)?". My answer is empathetically “No”.
5. The authority during the pendency of the appeal and in contravention of Section 107(7) of CGSC Act, 2017 debited the disputed interest amount. Petitioner sought for refund of unilateral debit of the disputed interest, while placing reliance on the order of the 2nd respondent who has ordered to re-credit on the premise is that amount was debited from cash ledger admittedly towards the disputed interest amount and therefore 2nd respondent opinioned that petitioner is eligible for re-credit to the Electronic cash ledger of the RTP.
6. However, respondent No.1 by the impugned order has rejected the request made by the petitioner seeking refund of disputed interest amount. Sub-section (7) of Section 107 plainly contemplates that where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed. Therefore, on examining the said provision coupled with the order passed by the 2nd respondent, this Court is of the view that unilateral debit undertaken by the Assessing Officer from the cash ledger towards the disputed amount of the creditor is not only erroneous and without jurisdiction and contrary to the mandate provided under sub-section(7) of Section 107. Therefore, this Court is of the view that order of rejection need not be sustainable and liable to be set aside.
7. For the foregoing reasons, this Court pass the following:
ORDER
(i) The writ petition is allowed.
(ii) The impugned order dated 03.09.2024 passed by the respondent No.1, is hereby set aside.
(iii) Consequently, the 2nd respondent is hereby directed to re-credit the disputed amount to the tune of Rs.13,92,041/- to the Electronic cash ledger of the RTP.
Sd/-
(SACHIN SHANKAR MAGADUM)
JUDGE