- Patna High Court held that a GST refund cannot be withheld merely because the Revenue’s appeal is pending before GSTAT; withholding must follow Section 54(11) of the CGST/BGST Act.
- The taxpayer, a works contractor, sought refund of about ₹1.75 crore from its Electronic Cash Ledger after an earlier refund denial based on alleged ineligible ITC of about ₹24.13 crore was set aside on appeal.
- The Court found no evidence that the Commissioner had carried out the mandatory Section 54(11) exercise before issuing the deficiency memo and attempting to withhold the refund.
- It ruled that refund withholding during appeal is allowed only if the Commissioner forms an opinion that payment would adversely affect revenue, after notice and a reasonable hearing.
- The Court directed issuance of a show-cause notice, hearing, and a reasoned order on whether to release or withhold the refund within one month after the hearing.
Source: a2ztaxcorp.net
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
