• Notification Date: 08-11-2021
• Notification No: 16/2021-22

Relief to SBI Cards & Payment Services: Punjab & Haryana HC directs Authority to Refund GST worth Rs. 108 crores paid under wrong head

In a major relief to SBI Cards & Payment Services, the Punjab & Haryana High Court directed the Authority to refund GST worth Rs.108 crores paid under the wrong head. The petitioner is a joint venture with the State Bank of India (SBI) wherein SBI holds 69.39% shares. SBI is a nationalized Bank and one of the largest Public Sector undertakings in India. The petitioner is engaged in the business of issuing credit cards to its customers (cardholder) and is duly registered with the Reserve Bank of India under Section 451 A of the Reserve Bank of India, Act 1934 as a non-deposit taking and non-banking financial company.

The petitioner has challenged the order dated 19.02.2021 issued by Additional Commissioner (Appeals) whereby the prayer for a refund of CGST & SGST amounting to Rs. 108 crores approximately wrongly paid on 5.4.2019 (for the disputed period i.e. from April 2018 to December 2018) more than the tax due under Section 77 of the Central Goods and Services Tax Act, 2017 has been declined. The division bench of Justice Ajay Tewari and Justice Alka Sarin opined that in a normal case this may have been an appropriate order to pass but in the present case it cannot be lost sight of that there is no dispute about the amount of tax, rather it was on the requirement of the respondents that the petitioner paid an additional amount of Rs.108 crores approximately. Had this amount not been paid, of course, what Mr Bindlish, the Standing Counsel is arguing, would have been applicable but once the petitioner paid that extra amount on asking of the respondents under the IGST the liability of the respondents to refund an amount of Rs.108 crores wrongly deposited under CGST & SGST cannot be disputed. “We cannot also lose sight of the fact that the money has now lain with the respondents for the past two and a half years,” the court added.

“The petition is allowed and respondents are directed to fund Rs.108 crores approximately which was deposited earlier by the petitioner towards CGST and SGST along with applicable interest within one month,” the court said.