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2020 (12) TMI 939 - HC - GSTRefund of excess cash deposited - Balance in Electronic Cash ledger - It is the case of the petitioner that a considerable quantity of the sales effected by it is to SUPPLYCO and FACT, who deduct tax at the rate of 2% on payments made to the petitioner in terms of Section 51 of the GST Act - HELD THAT:- From a perusal of Ext.P4 order that is impugned in the writ petition that the 2nd respondent has completely misunderstood the nature of the claim made by the petitioner as also the scope and ambit of Sections 51 and 54 of the CGST Act. In the instant case, as is evident from the facts stated in the writ petition as also from a perusal of the claim for refund preferred by the 2nd respondent, what the petitioner was essentially claiming was the refund of the balance remaining in the Electronic Cash Ledger, that was maintained in accordance with the provisions of the Act. Section 54(1) deals with claims for refund of any tax and interest or other amount paid by the assessee, and the proviso to Section 54(1) deals with claim for refund of any balance in the Electronic Cash Ledger. In the instant case, it is not in dispute that during the period for which the refund was claimed by the petitioner assessee, there was no outstanding liability towards tax, interest, penalty or any other amount under the Act, and there were excess amounts in the Electronic Cash Ledger of the petitioner-assessee that could be considered for refund to him in terms of the first Proviso to Section 54 of the Act. The 2nd respondent, however, misdirected himself and treated the claim for refund preferred by the petitioner as one relating to Section 51(8) of the Act. It has to be noted that at no stage did the petitioner have a case that the deduction of tax at source by SUPPLYCO/FACT was excessive or erroneous. That being the case, there was no occasion for the 2nd respondent to have considered the application as one traceable to Section 51(8) of the Act. The only exercise that had to be done by the 2nd respondent was to ascertain whether there was a balance in the Electronic Cash Ledger, after meeting the known liabilities of the petitioner towards tax, interest or any other amount under the Act, and if there was such a balance, the refund had necessarily to be granted to the petitioner. Ext.P4 order of the 2nd respondent cannot be legally sustained - the 2nd respondent is directed to ascertain the excess amount lying to the credit of the petitioner in his Electronic Cash Ledger after making provision for any known and determined liability of the petitioner towards tax, interest, penalty or other amounts under the Act - Petition allowed.
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