The Telangana High Court Refund of balance in electronic cash ledger cannot be denied for mere existence of Non Functional alternate Forum on paper.
The petitioner, M/s Appario Retail Pvt. Ltd. has been engaged in the business of trading of electronic goods over e-commerce platform by obtaining registration under the provisions of Goods and Service Tax Laws; that the petitioner procures electronic goods from various vendors based on forecasted demand of business and maintains huge inventory for the purpose of ensuring timely deliveries; that as a result of purchases affected by it, a very high balance of input tax credit of GST paid on its purchases is available in the electronic credit ledger; that on receiving orders through Electronic Commerce Operator (ECO), the sale is affected through ECO and goods are dispatched to customers; and that the tax liability is discharged by the petitioner by debiting the Electronic Credit ledger.
The petitioner contended that due to maintenance of huge inventory on account of purchases affected to meet the forecasted demand, the petitioner invariably has excess balance of ITC in its electronic credit ledger, which is utilized for discharge of GST liability, as and when sale of goods is effected through ECO, and therefore, the amount retained by the ECO and deposited with the Government under Section 52 of the CGST Act, as tax collected at source and reflected in petitioner’s electronic cash ledger remains unutilized; that the said unutilized balance in the petitioner’s electronic cash ledger can be claimed as refund in terms of Section 49(6) read with Section 54 of the CGST Act;and that the said balance amount in the electronic cash ledger is being refunded to the petitioner throughout India where it has operations, including in the State of Telangana.
The division bench of Acting Chief Justice M.S.Ramachandra Rao and Justice T.Vinod Kumar ruled that the petitioner cannot be compelled to wait for eternity to agitate its claim seeking refund of the amount to which it is entitled to under the statute and also blocking its funds affecting its cash flows, merely because of existence of (non functional) alternate forum/remedy on paper, by not invoking the jurisdiction under Article 226 of the Constitution of India. Further, mere existence of alternative remedy is no bar for invoking the jurisdiction under Article 226 of the Constitution of India, when right to carry on business is being impeded, resulting in violation of fundamental right as guaranteed under Article 19(1)(g) of the Constitution of India.
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