In Writ Petition No. 14297 of 2020 -MP HC- Madhya Pradesh High Court orders Western Railway Division to refund ITC of Rs. 13.38 Lakhs to Agrawal and Brothers
Justice Vivek Rusia & Justice Hirdesh [13-06-2023]

Read Order: Agrawal and Brothers V. Union of India and Ors

Chahat Varma

New Delhi, July 11, 2023: The Indore bench of the Madhya Pradesh High Court has allowed the writ petition filed by Agrawal and Brothers (petitioner) and has directed the Western Railway Division to return the input tax credit amounting to Rs. 13,38,544 to the petitioner.

Brief facts of the case were that the petitioner, a firm engaged in supplying and distributing iron and steel metal scrap, participated in an e-auction conducted by the Western Railway Division for the sale of scrap material. The petitioner emerged as the highest bidder and purchased 228 metric tons of scrap, including GST charges. However, there was an error in reporting the entries with respect to the purchase made in the e-auction of the petitioner by the Western Railway Division, leading to a demand notice being issued by the Superintendent, CGST and Central Excise. To avoid the cancellation of their GSTIN, the petitioner paid the demanded amount under protest. The payment was made again, along with interest, to rectify the mistake made by the railway division. However, the petitioner sought the return of the wrongly paid amount.

Considering the circumstances, the High Court held that no one should be made to suffer for the fault of another party. It acknowledged that the mistake in depositing the GST amount was the railway division's error and that the petitioner should not bear the consequences.

Consequently, the court allowed the writ petition filed by the petitioner. Additionally, the court awarded a cost of Rs. 10,000in favour of the petitioner, to be paid by the Western Railway Division.