Facts of the Case

The petitioner, Ramal Industries Private Limited, purchased inputs on payment of GST at 18% and, after undertaking a dyeing process, supplied the finished goods on collection of GST at 5%. On this basis, the petitioner claimed a refund of tax on account of the inverted duty structure for the period April 2019 to August 2019. The competent authority sanctioned the refund on 19.11.2019, but only 50% of the sanctioned amount — i.e. Rs.17,33,134/- out of the total sanctioned refund of Rs.34,66,268/- — was actually released to the petitioner. Aggrieved by the non-release of the remaining half, the petitioner filed this writ petition before the Punjab and Haryana High Court seeking a mandamus directing the Assistant Commissioner of State Tax, Ludhiana-1, Punjab, to release the balance sanctioned refund amount.

Issues Involved

  1. Whether the petitioner was entitled to a mandamus directing release of the remaining 50% of a refund amount already sanctioned by the competent authority on account of the inverted duty structure.
  2. Whether, and by whom, a decision on the petitioner's claim for interest on the delayed release of the refund was to be taken.

Petitioner's Arguments

  • The competent authority had already sanctioned the refund of Rs.34,66,268/- on 19.11.2019 under the inverted duty structure provisions, and no further adjudication on entitlement remained.
  • Only 50% of the sanctioned amount, Rs.17,33,134/-, had actually been released, leaving the balance unpaid without justification.
  • A mandamus was sought directing the Assistant Commissioner of State Tax, Ludhiana-1, Punjab, to release the remaining sanctioned refund amount forthwith.

Respondent's Arguments

  • Learned State counsel, on instructions from the Excise and Taxation Officer, O/o Assistant Commissioner of State Tax, Ludhiana-5, made a statement before the Court that the balance refund amount of Rs.17,33,134/- would be released to the petitioner-company within one month.
  • No independent opposition on the merits of the sanctioned refund was raised by the State.

Court Order/Findings

  • The Court accepted the statement made by learned State counsel that the balance refund of Rs.17,33,134/- would be made over to the petitioner within a period of one month from the date of the order.
  • The writ petition was disposed of on the basis of this statement.
  • On the question of interest for the delayed release of refund, the Court left it to the competent authority to take a decision — either to accept the claim, or, if denied, to pass a reasoned speaking order and convey it to the petitioner.

Important Clarification

  • Where a refund has already been sanctioned by the competent GST authority, a writ court will readily direct release of any unpaid balance amount on the department's own statement, without requiring fresh adjudication on entitlement.
  • A claim for interest on delayed release of a sanctioned refund is not automatically granted by the writ court; it may instead be relegated to the competent authority for a reasoned decision, which — if the claim is denied — must be communicated by way of a speaking order.

Sections Involved

  • Section 54, CGST Act, 2017 — provisions governing refund of tax, including refund on account of inverted duty structure where the rate of tax on inputs exceeds the rate on output supplies.

Decision – In Favour of

The decision is in favour of the Assessee. The Punjab and Haryana High Court disposed of the writ petition directing release of the balance sanctioned inverted-duty-structure refund within one month, while leaving the interest claim to be separately decided by the competent authority.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: High Court of Punjab and Haryana at Chandigarh
  • Case No.: CWP-6982-2022 (O&M)
  • Coram: Justice Tejinder Singh Dhindsa and Justice Pankaj Jain
  • Date of Order: 04.04.2022

Link to Download the Order

Download the full judgment (PDF)

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.