Client demanding complete refund of advance after cancellation of order after 6 months
We area small company engaged in supply & installation of floorings.
The Background: A client had approached us for his requirement of flooring in Feb/March 2021. He was given a quotation for the same. With paucity of wood flooring supplies, he was appraised of possible price fluctuations and a possibility to block material with payment of an advance. An advance was received on 28th March. A tax invoice for the advance received was raised and shared with the client Via email on 3rd April, 2021. GST against the same was duly remitted to the tax authorities.
As the client site wasn't ready we were asked to await instructions to start work.
He insisted that our estimated measurements didn't match his CAD drawings. We had the measurements redone, assuring that we could also do joint measurements for his satisfaction.
Towards the end of September, the client indicated telephonically the intent to reduce the area claiming he didn't have the money.
Early october, he has demanded a cancellation of the order, and a refund of the entire advance amount.
We have procured a special material based on his advance payment.
We have paid GST in March, 2021. It is now past 6 months and our CA advised that we cannot file for a credit after this time period.
We offered to return the advance amount minus the GST paid OR do work limited to the extent of the advance amount paid.
The client is demanding an immediate return of the entire advance without any deduction claiming that the advance cannot be considered as an order placed. He is threatening to go to consumer court and bad mouth the organisation if not done.
We would like to do what is right and legally correct. Please advise.
Asked 8 days ago in Business Law