M/S GVK JAIPUR EXPRESSWAY PVT. LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX

Facts

This matter concerns an application filed by the Department seeking clarification of an order dated May 17, 2023, passed by a Co-ordinate Bench of the Rajasthan High Court. The original writ petition was filed by M/s Gvk Jaipur Expressway Pvt. Ltd. The Department, in its application, stated that the refund for Assessment Years (AY) 2016-17 and 2017-18 was processed and adjusted by the Central Processing Centre (CPC) Bengaluru against pending demands of the petitioner. However, due to a system delay in reflecting the adjustment on the portal, the Co-ordinate Bench was under the impression that the refund was still payable and had directed the Department to refund the amount. The Department sought correction of this order.

Held

The High Court, after reviewing the additional affidavit filed by the Department and the annexed screenshot from the CPC 2.0 portal, was satisfied that the refund amount claimed by the original petitioner had already been adjusted by the Department against the pending demand of the petitioner. No counter-affidavit was filed by the original petitioner. Consequently, the application for clarification was allowed. The Court directed that paragraph 6 of the order dated May 17, 2023, be read as modified to include the condition: "if the said amount is already not adjusted against the outstanding demand of previous years." This clarified that the direction to refund was contingent on the amount not having been previously adjusted. The modified paragraph was to be treated as part of the original order.

Key Issues

1. Whether the refund amount for AY 2016-17 and AY 2017-18, claimed by the petitioner (M/s Gvk Jaipur Expressway Pvt. Ltd.), had already been adjusted against their pending demands, despite a delay in system reflection. (Mixed question of law and fact, concerning the application of Section 237 and Section 245 of the Income Tax Act, 1961, relating to refunds and set-off of refunds). Assessee's Contention: The Department argued that the refund for AY 2016-17 and AY 2017-18 was processed and adjusted by the CPC Bengaluru against the petitioner's pending demand. The delay in system update created an erroneous impression that the refund was still payable. Revenue's Contention: The Department (as the applicant) contended that the refund amount had indeed been adjusted, and nothing remained payable to the petitioner. They prayed for correction of the order dated May 17, 2023, to reflect this fact.