GST | Wrong-State Tax Payment Triggers ₹10.91 Lakh Refund Fight For Vodafone Idea

What began as a wrong-State GST payment has snowballed into a Rs 10.91 lakh refund dispute for Vodafone Idea Ltd. (Vi), after the Delhi GST Department rejected its refund claim. On Wednesday, the Delhi High Court declined to intervene, noting that the dispute turned on how the refund period was selected while filing the application.

The case arose after Vi mistakenly paid State GST under its Delhi registration instead of its Uttar Pradesh registration. The company later paid the tax again in Uttar Pradesh in September 2023 and sought a refund of the amount deposited in Delhi.

A Division Bench comprising Justice Nitin Wasudeo Sambre and Justice Ajay Digpaul heard Vi's challenge to the refund rejection, which was based on two grounds: limitation under Section 54 of the CGST Act and non-rectification of the GST return.

Appearing for Vi, Advocate Yogendra Aldak, argued that limitation under Section 54 should run from the date of knowledge of the mistake, and not from the original tax period. He submitted that limitation was never raised in the show cause notice, and that the refund rejection order had travelled beyond the notice. He also pointed out that the order relied on factors such as the cancellation of the recipient's GST registration, which were not part of the show cause notice.

Vi further submitted that it could not amend its GST return as the statutory time limit for making corrections had already expired.

Opposing the plea, Standing Counsel for the Delhi GST Department contended that the refund was not rejected on limitation alone. The Department questioned whether the tax paid in Delhi related to the same invoices and supplies, and maintained that limitation under Section 54 was mandatory.

The High Court noted that Vi had itself selected September 2023 as the refund period while filing the application. The court observed that the GST portal requires taxpayers, while applying for a refund, to select the tax period (From–To) for which the refund is claimed, and that this selection defines the refund period. This, the Bench held, raised factual issues requiring examination.

Declining to rule on the merits, the Court granted Vi liberty to approach the GST Appellate Tribunal, leaving all issues open.

Case Detail: Vodafone Idea Limited vs. Assistant Commissioner Central GST Division Mohan Cooperative Industrial Estate (MCIE)