Bombay HC quashes Offset of MVAT Refund against Outstanding Dues from Prior Years, Orders 2.7 Crore Payout

The Bombay High Court quashed the offset of Maharashtra Value Added Tax (MVAT) refund against outstanding dues from prior years, ordering a payout of ₹2.7 crore. The case involved a taxpayer who had an MVAT refund due but faced an offset against previous dues. The court found that the offset was not justified as the dues were from prior years and unrelated to the current refund claim. The court emphasized that the taxpayer was entitled to the refund without any offset, as the dues were not part of the same assessment period. This ruling highlights the importance of treating refunds and outstanding dues separately, ensuring that taxpayers receive their rightful refunds without unjust offsets. The decision is significant for businesses dealing with similar issues, providing a precedent for challenging unjust offsets of tax refunds against unrelated dues.