GST
TRT-2025-
Kerala High Court
Date:-07-12-22
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 7 December 2022
Facts –
- The petitioner, M/S Manappuram Finance Ltd is a non-banking finance company and is an assessee under the GST Regime.
- It was alleged that the petitioner is liable to pay tax on notice pay received from their former employees.
- The claim of refund by the petitioner for a refund of GST paid on notice pay received from the erstwhile employees was rejected by the appellate authority.
- Being aggrieved the appellant had filed an appeal.
Issue –
- Whether the petitioner is eligible for refund claim of GST paid on notice pay received from the employees?
Order –
- The Hon’ble High Court observed that Circular No.178/10/2022-GST dated 3.8.2022 clarifies that the amount of money received by the petitioner as notice pay from erstwhile employees is not a taxable transaction for the purposes of the GST laws.
- The fact that the Circular was issued only after the issuance of Ext.P1 order of the first appellate authority is no reason to hold that the petitioner is not entitled to the benefits of the Circular. In the light of the law laid down in Suchitra Components Ltd, the provisions of a Circular in the nature of Ext.P8 will have to be deemed to apply retrospectively.
- The fact that the period of limitation will start to run only from the date of the constitution of the Appellate Tribunal is no solace to the petitioner. The petitioner is, therefore, entitled to exercise the jurisdiction of this Court under Article 226 of the Constitution of India to challenge the orders impugned in this writ petition.
- Hence the writ petition is allowed. Ext.P1 and all orders rejecting the application of the petitioner for a refund of GST paid on notice pay received by the petitioner from its employees will stand quashed.
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