Case Summary
Case Title: M.S. Duroply Industries Ltd. v. Union of India & Ors.
Court: Gauhati High Court
Petition No.: WP(C)/7473/2023
Category of Dispute: Refund of Tax / Waiver of Interest & Penalty
Date of Judgment: 28.01.2025
Relevant Provisions: Section 128A of CGST Act, 2017; Section 50 of CGST Act; Section 11B of Central Excise Act, 1944.
Facts of the Case (Para 2–3)
The petitioner, M.S. Duroply Industries Ltd., challenged the Order-in-Original dated 02.06.2020 and the appellate order dated 31.03.2022 issued by CGST, along with a communication dated 06.09.2023. The dispute centered around a demand of ₹33,69,271/-. Pursuant to interim orders of the High Court dated 21.12.2023, the petitioner deposited the entire principal tax amount while penalty and interest were stayed.
During pendency, Section 128A was inserted into the CGST Act, 2017, granting waiver of interest and penalty for dues from 01.07.2017 to 31.03.2020 if tax was fully paid.
Questions Before the Court (Para 5–6)
The Court examined whether, in view of Section 128A and the admitted payment of tax, the petitioner was entitled to:
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Waiver of interest and penalty.
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Refund of the amount deposited, considering the department had already admitted eligibility for refund under Section 11B of the Central Excise Act, 1944.
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Adjustment of the tax paid via PLA account against GST returns filed on 31.10.2017.
Observations of the Court (Para 5–6, 2–3 of affidavit)
The Court observed that the legislative intent of Section 128A was to provide relief once tax was paid. It noted that the Department, through an affidavit dated 27.01.2025, accepted adjustment of the amount and agreed to refund the sum of ₹33,69,271/- deposited pursuant to earlier orders. This avoided unnecessary liability of interest under Section 11B refund mechanism.
Judgment (Para 6–8)
The Court disposed of the writ petition, holding that:
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The petitioner is entitled to benefits of Section 128A CGST Act, 2017, waiving interest and penalty.
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The petitioner is granted liberty to file a refund application for ₹33,69,271/-.
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Upon such application, the refund shall be granted within four weeks.
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The petition thus stood closed with clear recognition of the petitioner’s right to refund.
Table of Earlier Cases Referred
| Case | Court | Ratio / Verdict |
|---|---|---|
| No external precedents were cited directly in this judgment | – | Relief flowed solely from insertion of Section 128A CGST Act, 2017 and departmental concession |
Between Fine Lines
This judgment provides practical relief to taxpayers who have already discharged full GST liability for FY 2017–2020. With Section 128A in place, any interest and penalty demands automatically lapse. Importantly, if amounts were deposited under litigation, taxpayers can now apply for refunds with statutory backing, ensuring both revenue neutrality and avoidance of prolonged disputes.
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