Facts of the Case

The petitioner, Griham Food & Hotel Private Limited, had entered into a catering/licence contract agreement dated 11th August, 2017 with IRCTC for the unit JA-HWH(OC). The contract was later brought to an end by mutual cancellation, permitting the petitioner an honourable exit, with no forfeiture or debarment imposed. Following closure of the contract, the petitioner claimed refund of the GST component forming part of the licence fee already paid, and made repeated representations before the Group General Manager, IRCTC, Eastern Zone, Kolkata, commencing from 8th July, 2020. By an email communication dated 2nd December, 2021, IRCTC refused the prayer for refund of the licence fee for JA-HWH(OC). Aggrieved by this refusal, the petitioner approached the Calcutta High Court under its Constitutional Writ Jurisdiction (Original Side).

Issues Involved

  1. Whether IRCTC's refusal to refund the GST component of the licence fee, communicated without any reasons, can be sustained.
  2. Whether the petitioner is entitled to have its refund representation reconsidered on merits following mutual cancellation of the contract.

Petitioner's Arguments

  • The catering contract stood terminated by mutual agreement, with no forfeiture or debarment imposed on the petitioner.
  • Since the contract stood closed without fault attributable to the petitioner, the GST component paid as part of the licence fee ought to be refunded.
  • Multiple representations made since July 2020 were kept pending before being summarily refused by email on 2nd December, 2021.

Respondent's Arguments

  • The respondent authorities had, by the email communication dated 2nd December, 2021, refused the petitioner's prayer for refund of the licence fee for JA-HWH(OC) without elaborating any reasons on record before the Court.

Court Order/Findings

  • The Court noted that the refusal communicated on 2nd December, 2021 was completely devoid of reasons.
  • The Group General Manager, IRCTC, Eastern Zone, Kolkata was directed to reconsider the petitioner's representation and furnish appropriate reasons on the question of refund of the GST component.
  • While reconsidering, the authority was directed not to be bound by the refusal already on record, and was at liberty to revisit that refusal in the course of disposing of the representation.
  • The representation was directed to be disposed of within a period of one month from the date of the order, mandatorily and positively.

Important Clarification

  • A refusal of a GST refund claim communicated without recording any reasons is liable to be set aside in writ jurisdiction; the authority is bound to independently reconsider the claim on merits and support any adverse decision with reasons, rather than treat the earlier refusal as final.

Sections Involved

  • Goods and Services Tax law (general) — refund of GST paid as part of a licence fee/contract consideration upon termination of the underlying contract by mutual agreement.

Decision – In Favour of

Disposed of with directions, in favour of the Assessee — the unreasoned refusal was effectively set aside and IRCTC directed to pass a fresh, reasoned decision on the refund claim within one month; no final view was taken on entitlement to refund.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: Calcutta High Court (Original Side)
  • Case No.: WPO 1732 of 2022
  • Coram: Hon'ble Justice Rajasekhar Mantha
  • Date of Order: 5 April 2022

Link to Download the Order

Download the full judgment (PDF)

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