Bombay High Court
President Trade And Exim Corporation vs State Of Maharashtra on 12 February, 2026
Author: G.S. Kulkarni
Bench: G. S. Kulkarni
7.WPL16027_2024 (OS)CORRECTED.DOC
2026:BHC-OS:5354-DB
Vidya Amin
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 16027 OF 2024
President Trade And Exim Corporation ... Petitioner
Versus
The State Of Maharashtra & Ors. ...Respondents
_________
Mr. Manohar Samal a/w. Ms. Ruchi Rathod and Mr. Aishwary Jain i/b. Mr. Ratan
Samal for the petitioner.
Ms. Naira Jejeebhoy, Special Counsel a/w. Ms. Jyoti Chavan, Addl. G.P. and Mr.
Amar Mishra, AGP for the State.
__________
CORAM: G. S. KULKARNI &
AARTI SATHE, JJ.
DATE: 12 FEBRUARY 2026 Oral Judgment (Per G.S. Kulkarni)
1. Rule. Rule made returnable forthwith. Respondents waive service. By consent of the parties, heard finally.
2. This petition under Article 226 of the Constitution of India is filed praying for the following reliefs:
"a) This Hon'ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, setting aside and annulling the Refund Sanction-cum-Refund Adjustment Order which illegally adjusted the refund of tax Period : 2007-08 against alleged dues of Tax Period : 2008-09 ignoring the fact that there were no pending 'dues for recovery' so as to justify invocation of refund adjustment under the proviso appended to Section 50(1) of the MVAT Act, 2003 as the petitioner had already made an application for availing benefits under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act, 2023 before issuance of the refund adjustment order.
b) This Hon'ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, setting aside and annulling the Refund Sanction-cum- Refund Adjustment Order which illegally adjusted the refund of Tax Period: 2007-08 against alleged dues of Tax Period: 2008-09 without issuance of any defect notice and after the Petitioner had already made an Page 1 of 6 12 February, 2026
7.WPL16027_2024 (OS)CORRECTED.DOC application and had also paid the settlement dues under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act, 2023 as per instructions received in the Courtesy Letter issued by Respondent No. 2.
c) This Hon'ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, setting- aside and annulling the Refund Sanction-cum- Refund Adjustment Order which illegally adjusted the refund of Tax Period: 2007-08 against alleged dues of Tax Period: 2008-09 ignoring that the provisions of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fees Act, 2023 would override the provisions of the MVAT Act, 2002 once an application has been made under the Scheme and no deficiency by way of Defect Notice has been issued.
d) This Hon'ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, setting- aside and annulling the Refund Sanction-cum-Refund Adjustment Order which illegally adjusted the refund of Tax Period: 2007-08 against alleged dues of Tax Period: 2008-09 without providing a reasonable opportunity of being heard resulting in grave violation of principles of natural justice.
e) This Hon'ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, directing Respondent Nos. 2 and 3 to give effect to the Appeal Order dated 10th May, 2023 and to pay a refund of Rs.
33,29,000/- to the Petitioner.
f) This Hon'ble Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ or direction in the nature of Mandamus under Article 226 of the Constitution of India, directing Respondent Nos. 2 and 3 to pay additional interest amount u/s 53 of the MVAT Act, 2002 along with the principal refund amount of Rs.33,29,000/- as the refund amount was not paid to the petitioner within 3 months from the date of the Appeal Order..
g) This Hon'ble High Court may be pleased to issue any other Writ, order or direction that this Hon'ble Court may deem fit in the circumstances of the case."
3. The facts lie in a narrow compass : The three financial years as involved are 2007-08, 2008-09 and 2009-10. The relief as sought for by the petitioner is in respect of refund entitled to the petitioner under the Assessment order for the Financial Year 2007-08, however, the same has been denied to the petitioner, is the grievance as canvassed in the present proceedings.
4. It appears to be not in dispute that in the subsequent years, i.e., 2008-09 Page 2 of 6 12 February, 2026
7.WPL16027_2024 (OS)CORRECTED.DOC and 2009-10, admittedly there were demands against the petitioner. The said demands were disputed by the petitioner under Assessment order in the First Appeal. However, it has so transpired that in the intervening period, there was an amnesty scheme, which was notified and the demand in respect of tax period 2008-09 and 2009-10 came to be settled in terms of the Settlement Orders dated 16 April, 2024 and 18 April, 2024 whereby admittedly the petitioner deposited an amount of Rs.9,12,887/- for F.Y. 2008-09 and Rs.6,30,633/- for F.Y. 2009-10.
5. The case of the petitioner is that in terms of the Settlement orders, there was no demand whatsoever in regard to the said financial years. However, the case of the petitioner is that on the presumption and oblivious to what has happened to the amnesty scheme, the department sought to adjust the refund of Rs.33,29,000/- as payable to the petitioner for the F.Y. 2007-08, for the subsequent F.Ys. 2008-09 and 2009-10. This, according to the petitioner, was totally untenable in view of the settlements which had taken place in respect of demands in regard to the subsequent years. The petitioner contends that the retention of the amount of refund entitled to the petitioner for the F.Y. 2007-08 would be without authority of law and is contrary to the provisions of Article 265 of the Constitution of India in tax retained/collected. In support of such contention, learned counsel for the petitioner has placed reliance on the decision of the co-ordinate Bench of this Court in TML Business Services Ltd. vs. Deputy Commissioner of Sales Tax and Ors.1 in which in similar circumstances, the Court made the following observations granting the prayers as made by the petitioner:
1 2024 SCC OnLine Bom 2177 Page 3 of 6 12 February, 2026
7.WPL16027_2024 (OS)CORRECTED.DOC "16. There is no dispute that Petitioner's liability under the Settlement Scheme is Rs. 8,46,84,821/- as against which the Respondents have recovered from the Petitioner Rs. 19,16,74,501/-thereby resulting into excess collection by Respondents to the extent of Rs. 10,69,89,606/-. The excess arose because on 13th May 2019, Petitioner, under the Settlement Scheme, paid Rs.
8,46,84,821/- and subsequently on 23 rd May 2019, Respondents, without any authority of law, adjusted the refund for the year 2011-2012 amounting to Rs. 10,69,89,606/- against the demand for the year 2010-2011 which did not exist. This has not been disputed by Respondents. Therefore, even on this count, the claim of Petitioner for refund of Rs. 10,69,89,606/- is justified since it is a settled position that the State authorities cannot retain the excess amount which is not in accordance with law and same would be violative of Article 265 of the Constitution of India.
17. It is also important to note that the defect notice issued under Section 11 is dated 14th May 2019, wherein the outstanding amount as per Respondents record is shown at Rs. 3,30,85,284/- being difference between the outstanding for the year 2010-2011 amounting to Rs. 14,00,74,890/- and the adjustment of refund of Rs. 10,69,89,606/- for the year 2011-2012. We fail to understand as to how on 14 th May 2019, Respondents have arrived at the outstanding amount of Rs. 3,30,85,284/- after adjusting the refund for the year 2011-2012, when refund adjustment order is itself of 23 rd May 2019. Therefore, the defect notice itself is defective and not in accordance with the law. Furthermore, on a reading Section 11 of the Settlement Scheme, the defect notice is issued when there is a shortfall in making the payment and not when an applicant has paid the correct amount. In the instant case, on a perusal of the defect notice it states that requisite amount payable is Rs. 66,17,057/-, whereas Petitioner has paid Rs. 8,46,84,821/- which is excess payment and not short payment. Therefore, even on this count, defect notice is contrary to Section 11 of the Settlement Scheme."
6. Learned counsel for the petitioner has also placed reliance on the decision in Andreas Stihl Private Ltd. vs. The Joint Commissioner of State Tax, in which the issue which fell for consideration was whether the department would overlook the settlement which was arrived in terms of Section 13(1) of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2023. The Court considering the provisions of the Settlement Act as also the rules framed under the Maharashtra Value Added Tax Act, accepted the contention, as urged on behalf of the petitioner therein, that the cumulative effect of the provisions of the Settlement Act as also the Amendment Act would be to the effect that the settlement would have overriding effect for the purpose of adjustment and Page 4 of 6 12 February, 2026
7.WPL16027_2024 (OS)CORRECTED.DOC determination of arrears and hence the action of the department not to consider the settlement would not be an action in accordance with law.
7. In the present case, admittedly the department in no manner has questioned the settlement, which was arrived for the Tax Period 2008-09 and 2009-10 and thus the reliance placed on behalf of the petitioner on the decision in Andreas Stihl Private Ltd. (supra) cannot be said to be irrelevant.
8. On the other hand, Ms. Chavan, learned counsel for the revenue has taken all efforts to oppose the prayers as made in the petition. She contends that the decisions as relied on behalf of the petitioner would not be applicable in the facts of the case in justifying the actions of the department. However, she fairly states that the department has not disputed and/or has accepted the settlements and that there was no demand for the settlement periods, i.e., for the Tax Period 2008-09 and 2009-10. This is stated to be not in dispute.
9. We have heard learned counsel for the parties and also perused the record. In the light of the aforesaid discussion, we are of the opinion that the petitioner would clearly entitled for the refund of tax for the Tax Period 2007-08. Hence, the action on the part of the respondent to adjust the said refund for the subsequent Tax Period 2008-09 and 2009-10 is in fact rendered inconsequential and irrelevant in view of the settlement order referred by us hereinabove for the said period. Thus, there being no dispute whatsoever in regard to the demand for the said years, as such demands stood settled in the amnesty scheme issued by the respondent. In these circumstances, there was no occasion for the department to Page 5 of 6 12 February, 2026
7.WPL16027_2024 (OS)CORRECTED.DOC retain the refund entitled to the petitioner for the Tax Period 2007-08 to be adjusted for the purported demands for the next year, in view of the demand being settled.
10. In this view of the matter, we are inclined to allow this petition. The petition is accordingly allowed in terms of prayer clauses (a) and (e). The refund amounts be released to the petitioner within a period of two weeks from today along with interest as per rules.
(AARTI SATHE, J.) (G. S. KULKARNI, J.) Corrected as per speaking to the minutes of order dated 26.02.2026 Signed by: Vidya S. Amin Page 6 of 6 Designation: PS To Honourable Judge 12 February, 2026 Date: 27/02/2026 15:03:22