2021 (6) TMI 216 - HC - GST

Refund of GST from the electronic cash ledger - it is submitted that once an acknowledgment is issued in respect of the refund application, no deficiency memo can be issued - HELD THAT - There is a default in compliance of Rule 90(1) read with para 2(d) of Circular No.79, and since the acknowledgment in FORM GST RFD-02 was not issued within 15 days, the order under challenge is set aside and the matter is remanded back to the 1st respondent to deal with the request of the petitioner in all respects, in accordance with law, within a period of two to three weeks from 25.11.2020. Petition allowed by way of remand.

Issues:
1. Rejection of claim for balance amount in electronic Cash ledger without following procedure.
2. Rejection of refund after one year without following statutory procedure.
3. Entitlement for refund along with interest under SGST Act.
4. Setting aside the order of rejection and directing refund with interest.
5. Compliance of Rule 90(1) and Circular No.79 regarding acknowledgment issuance.

Analysis:
1. The petitioner sought relief regarding the rejection of their claim for a balance amount in the electronic Cash ledger. The court was urged to declare the rejection as arbitrary, illegal, and violative of natural justice and constitutional principles. The court noted the absence of provision for passing an order of rejection in such cases under the Statute. The respondent's counsel indicated that if all required documents were furnished, the authorities would consider the claim. Due to a default in compliance with Rule 90(1) and Circular No.79, the court set aside the order of rejection and remanded the matter back to the 1st respondent for proper consideration within a specified timeframe.

2. Another issue raised was the rejection of the refund after one year without following the statutory procedure. The petitioner sought a declaration that the notice and order issued for rejection were void and without jurisdiction. The court emphasized the importance of compliance with the statutory procedure, specifically mentioning the issuance of acknowledgment within 15 days as per Rule 90(1) and Circular No.79. The court found the delay in issuing the acknowledgment and set aside the order of rejection, directing the 1st respondent to address the petitioner's request in accordance with the law within a specified timeframe.

3. The petitioner also claimed entitlement to a refund of a specific amount along with interest under the SGST Act. The court considered this claim and directed the 1st respondent to refund the specified amount along with interest at a prescribed rate from a particular date until the date of payment. This decision was made after setting aside the initial order of rejection and remanding the matter for proper consideration.

4. In addition to setting aside the order of rejection and directing the refund with interest, the court issued specific directions to the 1st respondent to comply with the statutory provisions and consider the petitioner's request appropriately within a defined period. The court's decision aimed to ensure that the petitioner's claim for refund, along with interest, was processed in accordance with the law and principles of natural justice.

5. The judgment highlighted the importance of compliance with Rule 90(1) and Circular No.79 regarding the issuance of acknowledgment within a specified timeframe. The court's decision to set aside the order of rejection was primarily based on the failure to adhere to the prescribed procedures, emphasizing the significance of procedural compliance in matters related to refund claims and electronic Cash ledger transactions.

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