HC Orders Refund Of GST Recovered Before Limitation Period

Case Details: Bhawya Enterprises Versus Assistant Commissioner, State Taxes & Excise (2025) 33 Centax 140 (H.P.) 

Judiciary and Counsel Details

• Vivek Singh Thakur & Sushil Kukreja, JJ
• Mrs Vibhooti Malhotra, S/Shri Vardaan Malhotra & Atul G. Sood, Advs. for the Petitioner
• Ms Sharmila Patial, Addl. Adv., Ms Reeta Thakur, Sr. Panel Counsel, Ms Aastha Kohli, Adv., Amar Nath Gautam, Assistant Commissioner

Facts of the Case

The petitioner’s grievance was that the Assistant Commissioner had recovered the demanded CGST from its account within five days of passing the adjudication order dated 01.05.2025, much before expiry of the statutory period of three months available for filing an appeal under Section 107 of the CGST Act. It was contended that premature recovery prejudiced the petitioner’s right to file an appeal, as the GST portal insisted on pre-deposit of 10% of the disputed tax, but the amount already recovered was being treated as admitted tax and not as pre-deposit. The Assistant Commissioner himself issued a certificate admitting that the recovery had been made inadvertently for the financial years 2018-19 and 2019-20. Despite such admission, the recovered amount was not reversed to the petitioner’s account, compelling the filing of the writ petition. 

High Court Held

The High Court observed that since the officer had admitted that the recovery was made by mistake, the amount so recovered was liable to be refunded or reversed to the very account from which it was debited. The Court directed the respondent authority to rectify the mistake and refund/reverse the recovered amount along with applicable statutory interest on or before 26-07-2025. It was clarified that no opinion was being expressed on the merits of the demand raised under order dated 01-05-2025, and the same would remain subject to the outcome of any statutory appeal or remedy availed by the petitioner. With these directions, the petitions were disposed of.