PEDERSEN CONSULTANTS INDIA PVT LTD
VERSUS
UNION OF INDIA & ORS.
Citation: 2024 taxo.online 508
In the High Court of Delhi, Justices Sanjeev Sachdeva and Ravinder Dudeja presided over the case of Pedersen Consultants India Pvt Ltd v. Union of India & Ors. (W.P.(C) 1039/2024 dated 19.03.2024), which pertains to the Goods and Services Tax (GST) law, specifically under the Central Goods & Services Tax Act, 2017, Section 54. The central issue revolved around the reversal and subsequent refund of Input Tax Credit (ITC) due to the supplier’s failure to file returns on time.
The petitioner, Pedersen Consultants India Pvt Ltd, had claimed ITC on certain invoices, but the supplier failed to file the necessary tax returns in a timely manner. As a result of this delay, the tax department directed the petitioner to reverse the claimed ITC and deposit the equivalent amount with the government. Later, it was discovered that the supplier had eventually filed the returns and paid the tax on the invoices in question, leading to a situation where the tax was effectively paid twice—once by the petitioner and once by the supplier. Consequently, the petitioner filed a writ petition seeking a refund of the ITC that had been reversed and paid due to the supplier’s late filing.
The court held that ITC cannot be denied solely due to the supplier’s delay in filing returns. It allowed the petitioner to file a refund application for the reversed ITC, provided the supplier had subsequently filed the returns and paid the relevant taxes. The court also directed the exclusion of certain periods from the limitation period for filing the refund application. Specifically, the time between the filing of the writ petition on 19.01.2024 and the court’s decision date would be excluded from the limitation period, as well as the period covered by Notification No. 13/2022, which excludes the timeframe from 01.03.2020 to 28.02.2023.
During the hearing, it was noted that the petitioner had not filed the appropriate refund application as mandated by Section 54 of the Central Goods & Services Tax Act, 2017. The court permitted the petitioner to file this application within one week and clarified that the merits of the petitioner’s claim were not being commented upon. The proper officer would adjudicate the refund claim in accordance with the law.
This judgment underscores the principle that procedural delays by suppliers should not unfairly penalize recipients of goods and services. The decision ensures that recipients are entitled to appropriate refunds in cases of double tax payments due to such delays. It emphasizes the importance of adhering to procedural requirements while also providing relief in situations where administrative or procedural errors lead to financial discrepancies.
Overall, the court’s decision to remand the matter back and allow for a refund application reflects a balanced approach, ensuring that tax compliance mechanisms are upheld without causing undue hardship to taxpayers. This case serves as an important reminder for both suppliers and recipients to maintain timely and accurate tax filings to avoid complications and financial losses.
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