2021 (12) TMI 63 - HC - GST

Application for refund filed manually - failure to upload Statement 5B along with refund applications - applications returned in terms of Circular No. 125/44/2019-GST dated 18th November 2019 - HELD THAT - The origin of the impugned circular can be traced to section 168 of the Central Goods and Services Tax Act 2017 which empowers the Central Board of Indirect Taxes and Customs (hereafter the Board for short) to issue such orders instructions or directions to the central tax officers as it may deem fit and thereupon all such officers and all other persons employed in the implementation of the CGST Act shall observe and follow such orders instructions or directions. There can hardly be any dispute that the said Superintendent was under an obligation to follow the terms of the impugned circular - the said Superintendent failed to appreciate that the impugned circular could not have been ignored on the face of rule 97A which is equally binding on him in the discharge of his duties. Since rule 97A contains a non-obstante clause it is intended to override rules 89 to 97 of the CGST Rules forming part of Chapter X. The plain and simple construction of rule 97A is that despite rule 89 providing for electronic filing of applications for refund on the common portal in respect of any process or procedure prescribed in Chapter X any reference to electronic filing of an application on the common portal shall in respect of that process or procedure include manual filing of the said application - thus the impugned circular would certainly be applicable to all applications filed electronically on the common portal but the impugned circular cannot affect or control the statutory rule i.e. rule 97A of the CGST Rules or derogate from it. The impugned circular is clarified and it is observed that its terms shall be applicable only to applications filed electronically on the common portal but would have no applicability to an application for refund which is filed manually - Petition allowed.

Summary

Issues:
1. Validity of Circular No. 125/44/2019-GST dated 18th November 2019 regarding online filing of refund applications.
2. Interpretation of rule 97A of the Central Goods and Services Tax Rules, 2017.
3. Compliance with statutory provisions and circular instructions in processing refund applications.

Analysis:
1. The petitioner challenged Circular No. 125/44/2019-GST, arguing it was ultra vires the CGST Act as it mandated online filing of refund applications only. The petitioner sought permission to file refund applications manually if unable to do so online. The Court noted the obligation of officers to follow circulars but emphasized that the Superintendent must also adhere to the CGST Act and Rules. The Court found the Superintendent erred in not accepting manual applications despite Rule 97A allowing manual filing alongside electronic filing.

2. Rule 97A, inserted in the CGST Rules, allows manual filing despite provisions for electronic filing. The Court held that the rule overrides rules 89 to 97, ensuring manual filing is accepted for refund applications. The Court clarified that the impugned circular applies to electronic filings but does not supersede rule 97A, which must be respected. The Court rejected the argument that only online applications could be processed, preserving the purpose of rule 97A and upholding manual filing rights.

3. Referring to a previous decision, the Court emphasized that officers must follow Board instructions but cannot disregard statutory rules. The Court set aside the Superintendent's letter and allowed the petitioner to refile the refund application manually. The Superintendent was directed to process the application promptly, providing reasons for rejection if applicable. The Court ordered timely refunds for eligible applicants. The writ petition was allowed, emphasizing compliance with both circular instructions and statutory rules.

This detailed analysis highlights the Court's interpretation of the impugned circular, rule 97A, and the importance of adherence to statutory provisions and circular instructions in processing refund applications.