2020 (7) TMI 611 - HC - GST

Grant of refund along with interest - zero-rated supply of goods or services or both made by registered persons - HELD THAT - Admittedly, till date the petitioner s refund application dated 4th November, 2019 has not been processed. As neither any acknowledgment in FORM GST RFD-02 has been issued nor any deficiency memo has been issued in RFD-03 within time line of fifteen days, the refund application would be presumed to be complete in all respects in accordance with sub-rule (2), (3) and (4) of Rule 89 of CGST/DGST Rules - To allow the respondent to issue a deficiency memo today would amount to enabling the Respondent to process the refund application beyond the statutory timelines as provided under Rule 90 of the CGST Rules. This Court is of the view that the respondent has lost the right to point out any deficiency, in the petitioner s refund application, at this belated stage - this Court directs the respondent to pay to the petitioner the refund along with interest in accordance with law within two weeks. Petition disposed off.

Summary

Issues:
Petition seeking refund under Section 54 of DGST Act and interest under Section 56 of DGST/CGST Act.

Analysis:
The petitioner filed a writ petition seeking a refund of ?9,12,893 claimed under Section 54 of the Delhi Goods and Services Tax Act, 2017, for August 2019, and interest as per Section 56 of the Act. The petitioner argued that despite the expiry of the fifteen-day period from the filing date of the refund application, the respondent had not acknowledged the application or pointed out any deficiencies. The petitioner had faced similar delays in previous refund applications as well. The respondent admitted the delay and mentioned the need to issue a deficiency memo due to certain documents not being uploaded with the refund application. However, the court noted that Rules 90 and 91 of the CGST/DGST Rules provide a strict timeline for processing refunds and acknowledging applications. The rules state that if deficiencies are noted, the applicant must rectify them and file a fresh refund application. Failure to act within the stipulated period attracts consequences like payment of interest under Section 56 of the Act.

The court found that as the respondent had not issued an acknowledgment or a deficiency memo within the fifteen-day timeline, the refund application was deemed complete as per Rule 89 of the CGST/DGST Rules. Allowing the respondent to issue a deficiency memo at a later stage would enable processing the refund beyond statutory timelines, potentially leading to rejection of the initial application and requiring the petitioner to file a fresh one. This would delay the refund process and affect the petitioner's right to claim interest from the original filing date. The court also noted that all relevant documents were annexed with the petition, and the respondent was satisfied with their authenticity. Therefore, the court held that the respondent had forfeited the right to point out deficiencies at a later stage.

Consequently, the court directed the respondent to pay the petitioner the refund amount along with interest within two weeks. The writ petition was disposed of with these directions, and the order was to be uploaded on the website immediately, with a copy forwarded to the counsel via email.