In Writ Petition No. 12914 of 2020 -KAR HC- Karnataka High Court orders fresh adjudication on Tax refund claim by M/s Workplace Options Pvt. Ltd.
Justice S. Sunil Dutt Yadav [20-07-2023]

Read Order: M/s Workplace Options Private Limited V. Union of India and Ors.

Chahat Varma

New Delhi, August 14, 2023: The Karnataka High Court has ordered fresh adjudication of a refund claim submitted by M/s Workplace Options Private Limited (petitioner). The Court emphasized that the key issue revolved around determining whether services were indeed provided in December 2017. If it was established that services were rendered during that time, the Court indicated that the refund claim should be granted.

In the present case, the petitioner, who had entered into an Intercompany Master Services Agreement with M/s. Workplace Options India Pvt. Ltd., located outside India, argued that as an Exporter of Services, they were entitled to supply and export services without paying tax. They claimed a refund of accumulated Input Tax Credit due to export with payment of output tax. Despite opting for this method, their applications for tax refund for December 2017 were partially rejected. The refund of Rs. 66,68,794 was denied on the basis that these were considered mere adjustment bills to compensate for the petitioner's company shortfall, not related to any service activity.

On the other hand, the Revenue's counsel argued that the petitioner's claim was rejected because it did not pertain to the period from December 2017 to March 2018, and also raised doubts about whether services were indeed provided during December 2017.

After considering the arguments presented by both parties, the single-judge bench of Justice S. Sunil Dutt Yadav concluded that the core issue revolved around determining whether services were indeed provided in December 2017. The petitioner claimed that an invoice was not raised for the services during that period but was subsequently issued in March 2018. The bench highlighted the need to re-evaluate this aspect. It emphasized that recording a finding regarding the rendering of services in December 2017, while taking into account Clause-2 of the Intercompany Master Services Agreement, would be crucial in resolving the dispute.

Accordingly, the matter was remitted for fresh adjudication. It was however, observed that the remand was being made with a specific direction to record a finding, as observed above.