Portescap India Pvt. Ltd. Vs Union of India and Ors
Date: November 12, 2024
Court: High Court
Bench: Bombay
Type: Writ Petition
Subject Matter
Action ordered against erring GST Officers for delay in granting refund
Summary
The Hon’ble Bombay High Court criticized the Revenue department for failing to process refund applications submitted by a subsidiary of a foreign company back in 2014, despite multiple reminders. The court found the explanation provided by the department, which claimed that the applications were lost, unsatisfactory. Consequently, it ordered the processing of these applications within a strict deadline of four weeks, along with interest calculated from the date of application. The court also instructed the Commissioner of GST to hold accountable the officers responsible for this bureaucratic delay and mandated recovery of the refund amounts from them, emphasizing that officers are trustees of public funds and should face consequences for harming taxpayers and damaging the public exchequer. Other notable points from the ruling include: - The original adjudicating authority was criticized for not acting on a previous appeal order issued in 2018 regarding a related refund claim. - The High Court has mandated that investigations be completed within specified time frames, ensuring adherence to principles of natural justice. The High Court ultimately directed the Commissioner of GST to file a compliance report by February 15, 2025, detailing all actions taken regarding the case.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Heard learned counsel for the parties.
2. The Petitioner filed applications at Exhibits “A-1,” “A-2,” and “A-3” in 2014 seeking refunds. To date, the applications have not been processed.
3. The matter was adjourned so that the learned counsel for the Respondents could state the timeline within which these applications would be disposed of. At that time, this Court did not realise that the applications were made in 2014 and thought they had been pending for two or three years.
4. Today, learned counsel for the Respondents stated that the applications would be disposed of within eight weeks. Considering that they have been pending since 2014, we direct that they be disposed of in accordance with the law and on their own merits within four weeks from today.
5. Since interest on refunds is required to be granted from the date of the applications, if ultimately any refund and interest thereon are found payable, then we direct the CGST Commissioner to inquire into the causes of the pendency of these applications for the last ten years. The officers responsible for this delay must be held accountable, and necessary steps should also be taken to recover the additional amounts that would have to be paid to the Petitioner on account of this inordinate delay from such officers.
6. Ultimately, it must be noted that the officers are only trustees. If, on account of reasons attributable to them, the assesses are harassed, the public exchequer is forced to suffer and is drained, then the principles of accountability require that such officers compensate the assesses and the public exchequer. This is in addition to any departmental proceedings that would have to be initiated against such officials.
7. By an order dated 28 May 2018, in the context of application at Exhibit “A-4”, the Commissioner (Appeals) allowed the Petitioner’s Appeal to the extent of claimed amount of Rs.4,91,880/- being refund of Service Tax paid on or after 1 March 2011. However, the matter was remitted to the Original Adjudicating Authority to verify the claimed amount’s correctness in the light of the Notification dated 1 March 2011.
8. Though no time limit was set for verification, it was expected that it would be completed within a reasonable period of two to three months. The Original Adjudicating Authority has not bothered to verify and comply with the Commissioner (Appeals) order dated 28 May 2018 for six years, which is entirely unacceptable.
9. Accordingly, we also direct the concerned Original Adjudicating Authority to comply with the directions in the order dated 28 May 2018 within four weeks from today. We further direct the Commissioner, GST, to investigate the matter, determine the reasons for this inordinate delay, and fix responsibility on the concerned official/s. After assigning responsibility, the loss to the public exchequer must be recovered from the officer/s concerned.
10. We direct that the Commissioner, GST, undertake this exercise of holding enquiries and fixing responsibilities, consistent with the principles of natural justice and fair play and after following the usual procedures. However, this exercise must be completed within three months from today, and the Commissioner, GST, must file a compliance report in this Court giving full particulars and details.
11. We dispose of this Petition by issuing the above directions. But the Commissioner, GST must file a compliance report in this Court, giving full particulars and details on or before 15 February 2025.
12. All concerned to act on an authenticated copy of this order.