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2021 (7) TMI 869 - Commissioner - GSTRefund of excess paid ITC - refund rejected on the ground that the excess payment of ITC can be re-credit to ITC ledger only by GST PMT-03 as per sub rule (4A) of Rule 86 CGST Rules,2017 as amended vide N/N. 16/2020 dated 23.03.2020 - Ambiguity in the order - HELD THAT - On examination of reconciliation chart in respect of tax liability of the appellant, generated by appellant through GSTN common portal, as well perused the ledger account of balance sheet with regard to output supply in month of October-2019 it is found that the appellant had made supply only two suppliers on 21.10.2019 and 24.10.2019, wherein GST payable were ₹ 9,093.76 only and same are being reflected in GSTR-1, however, GST were paid through ITC ₹ 2,69,212.54 and same are also being reflected in GSTR-3B. Therefore, in view of the records it is found that the appellant had paid excess tax of ₹ 2,60,118.24 through ITC in month of October-2019. On going through the provisions of Rule 86 (4A) read with Rule 92 (1A) of CGST Rules, it is found that if any registered person has claimed any refund amount paid as Tax wrongly paid or paid in Excess for which debit has been made from the Electronic Credit Ledger the said amount shall be re-credited by an order in Form of CGST PMT-03 to the Electronic Credit Ledger of the registered person by the proper officer. There are force in the appellant contention that excess tax paid through ITC should be re-credited in Form PMT-03 - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Rejection of refund claim due to procedural error. 2. Proper processing of refund through Form GST PMT-03. 3. Excess payment of taxes and its reconciliation. 4. Adjudicating authority’s negligence and procedural lapses. Issue-wise Detailed Analysis: 1. Rejection of Refund Claim Due to Procedural Error: The appellant, M/s Sameer Exports, filed a refund application amounting to ?2,60,118/- for excess payment of tax through ITC in October 2019. The adjudicating authority issued a Show Cause Notice (SCN) proposing rejection of the refund claim, stating that "The Excess payment of ITC can be re-credited to ITC ledger only by GST PMT-03 as per sub rule (4A) of Rule 86 CGST Rules, 2017 as amended vide Notfn No.16/2020 dated 23.03.2020." Despite the appellant agreeing to this, the adjudicating authority erroneously rejected the refund claim by passing the order in Form GST RFD-06 instead of Form PMT-03. 2. Proper Processing of Refund through Form GST PMT-03: The appellant contended that the proper officer’s only concern was the manner of processing the refund, which should be re-credited in the Electronic Credit Ledger via Form PMT-03. The appellant accepted this method, yet the refund claim was rejected. The appellant argued that the rejection was arbitrary and due to gross negligence, as the proper procedure was not followed according to Rule 86(4A) and Rule 92(1A) of the CGST Rules, 2017. These rules mandate that any refund of excess tax paid through the Electronic Credit Ledger should be re-credited using Form PMT-03. 3. Excess Payment of Taxes and Its Reconciliation: The appellant mistakenly paid ?1,34,606.27 each for CGST and SGST in October 2019, instead of the actual tax liability of ?4,546.88 each. This led to an excess payment of ?2,60,118/-. The appellant provided a reconciliation statement, audited financial statements, and a CA certificate to substantiate the excess payment. The adjudicating authority acknowledged the excess payment but failed to process the refund correctly due to technical issues. 4. Adjudicating Authority’s Negligence and Procedural Lapses: The appellant argued that the adjudicating authority’s rejection of the refund claim was due to negligence and procedural lapses. The authority intended to re-credit the excess tax but mistakenly issued the order in Form RFD-06. The appellant sought redress through quasi-judicial authorities, emphasizing that the proper officer’s actions were contrary to the prescribed procedures and clarifications issued by the board. Conclusion: Upon review, it was found that the appellant had indeed paid excess tax and that the proper procedure for re-crediting this amount via Form PMT-03 was not followed. The appeal was allowed, and the proper officer was directed to process the refund in accordance with the relevant provisions of the CGST Rules, thereby re-crediting the excess tax to the appellant’s Electronic Credit Ledger. The appeal was disposed of accordingly.
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