Recovery impermissible for Refunded Cess merely on Overruling of Refund Order by SC: Sikkim HC warns of Rs. 20K Cost on Central GST Commissioner

The Sikkim High Court has ruled that cess refunded prior to an overruling decision by the Supreme Court cannot be recovered retrospectively. The case involved the Central GST Commissioner seeking to recover refunded cess based on a change in legal position following an overruling decision by the Supreme Court. The High Court warned the Central GST Commissioner of a ₹20,000 cost for initiating baseless matters before the court. The court emphasized that retrospective recovery of refunded cess is impermissible and that changes in legal interpretation cannot be applied to past transactions. This ruling protects taxpayers from retrospective changes in tax liability and ensures that legal decisions are applied prospectively.