Desk of CA. Praveen Sharma – 930 Series (CAPS) 

CALCUTTA HIGH COURT IN THE CASE OF Jai Balaji Industries Limited 

The case was about recovery of ?25 lakh that was wrongly transferred because of a clerical or typing mistake in the beneficiary bank account number. 

The company intended to transfer money to M/s Mortex International, but due to the error, the amount was credited to Sai Fertilizer Pvt. Ltd.

As soon as the mistake was noticed, the company approached Yes Bank for reversal of the amount, but the bank kept the funds on hold.

Despite several representations and even a complaint to the RBI Ombudsman, the amount was not refunded.

Sai Fertilizer Pvt. Ltd. filed an affidavit before the Court clearly stating that the money did not belong to them and gave consent for its return.

The GST authorities invoked Section 79(1)(c) of the CGST/WBGST Act and advised the bank to retain the amount for tax recovery.

The Court held that Section 79 was not applicable because the money never belonged to the alleged tax defaulter.

The Court accepted that the transfer was purely a genuine mistake, with no business transaction or tax liability involved.

The Court directed Yes Bank to refund ?20 lakh and ?5 lakh to the petitioner’s SBI and ICICI Bank accounts within one week, and disposed of the matter.

LINK: CA. Praveen Sharma on Linkedin

Regards
CAPS