Relief Under Section 128A: Gauhati High Court Allows Refund to
Duroply Industries
(M/s
Duroply Industries Limited vs Union of India & Ors. - Gauhati High Court)
Introduction
In a practical and
taxpayer-friendly decision, the Gauhati High Court has granted relief to
Duroply Industries Limited by allowing refund of the tax amount already
deposited and extending the benefit of Section 128A of the CGST Act. This
judgment reflects a balanced approach where the Court focused on fairness and
real tax impact instead of following a rigid technical process.
Background
of the Case
Duroply Industries
Limited, a manufacturing company, had challenged certain GST orders passed by
the department, including the original adjudication order and the appellate
order. During the pendency of the writ petition, the Court directed the company
to deposit the principal tax amount of ₹33,69,271 while granting relief from
recovery of interest and penalty. The company complied with this direction and
deposited the full tax amount, which became an important factor in deciding the
case.
Impact of
Section 128A
While the matter was
still pending, a significant legal development took place with the introduction
of Section 128A in the CGST Act. This provision states that where a taxpayer
has paid the full tax amount for the period from 1 July 2017 to 31 March 2020,
no interest or penalty is payable, and the proceedings are treated as
concluded. Since Duroply Industries had already paid the entire tax amount,
this new provision directly supported its case and changed the overall
situation in its favour.
Court’s
Practical Approach
The Gauhati High Court
adopted a practical and logical approach while dealing with the matter. Instead
of directing the petitioner to go through a lengthy refund process, the Court
considered whether the amount already deposited could be adjusted against
earlier GST returns. The Court also observed that if the refund was processed
through the usual route, the department might have to pay interest, which would
unnecessarily burden the revenue. Therefore, the Court aimed to find a solution
that would avoid unnecessary procedures and bring a fair outcome.
Stand of
the Department
In response to the
Court’s observations, the GST department agreed to the suggested approach. It
stated that the amount deposited by the company could be adjusted against its
earlier GST returns and that the amount deposited as per the Court’s order could
be refunded. This stand of the department helped in resolving the issue
smoothly without further litigation.
Final
Decision
Taking into account the
submissions of both sides, the Gauhati High Court disposed of the writ petition
by granting liberty to the petitioner to file a refund application. The Court
directed the department to process and grant the refund within four weeks from
the date of such application. It was also made clear that the petitioner would
be entitled to the benefit of Section 128A, meaning that no interest or penalty
would be payable.
Conclusion
This judgment clearly
shows that when the taxpayer has already paid the full tax amount, there is no
need to impose additional burden in the form of interest, penalty, or
procedural delays. The Gauhati High Court ensured that the matter was resolved
in a fair and efficient manner by allowing refund and recognizing the benefit
of Section 128A. The decision sets a good example of how GST disputes should be
handled with a practical and taxpayer-friendly approach.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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