2022 (7) TMI 756 - HC - GST

Refund of Central tax and state tax - proper jurisdiction to process the refund claim - proper officer or RAC - Section 54(5) and (6) of the Central Goods and Services Tax Act, 2017 - HELD THAT - The non-application of mind is sought to be demonstrated by Mr Jain by adverting to the contents of the said notice. The notice sought to give the petitioner ten days to file a reply, even while its authorized representative was directed to appear before the concerned officer within three days i.e., 25.05.2018. Mr Jain says that Rule 92(3) of the Central Goods and Services Rules, 2017, required the respondents to grant 15 days to the petitioner for filing the reply - Since Mr Satyakam is in difficulty today, list the matter on 14.07.2022, at the end of the Board.

Issues Involved:
Challenge to the rejection of refund claims under GST Acts, jurisdiction of Refund Approval Committee, denial of refund under Central Tax due to alleged availing of drawback, denial of refund of State Tax and Cess without proper notices, non-compliance with rules regarding reply timeframes.

Analysis:

1. Refund Rejection under GST Acts:
The petitioner challenged the rejection of refund claims under the GST Acts. The order dated 23.07.2018 was assailed as it entirely rejected the central tax and cess refund claims, partially rejecting the state tax refund. The petitioner sought various reliefs, including quashing the impugned orders and directing the refund under Section 54 of the Acts. The rejection was based on the decision of the Refund Approval Committee (RAC), which the petitioner contended was not the proper authority for processing refund applications under Section 54(5) and (6) of the Central Goods and Services Tax Act, 2017. The petitioner highlighted the reliance on RAC decisions through various orders starting from 08.02.2018, challenging the validity of such processing.

2. Denial of Central Tax Refund due to Alleged Drawback Availment:
The denial of central tax refund was based on the third proviso of Section 54(3) of the Central Act, which prohibits refund of input tax credit if the supplier avails of drawback in respect of central tax. The petitioner contended that they had not availed of any drawback, supported by the counter-affidavit filed by the Commissioner of Customs (Drawback). The petitioner pointed out that the duty drawback was not sanctioned, as confirmed by the respondent, and the amount deposited in anticipation was later refunded. This discrepancy formed the basis for challenging the denial of central tax refund.

3. Denial of State Tax and Cess Refund without Proper Notices:
The petitioner raised concerns regarding the denial of state tax and cess refund without proper notices. It was argued that no notice was issued for the state tax refund denial, and the notice issued for central tax rejection did not comply with the required timeframe for filing a reply as per Rule 92(3) of the Central Goods and Services Rules, 2017. The petitioner emphasized the lack of issuance of notices for the denial of state tax and cess refunds, indicating a lack of due process in the decision-making process.

4. Compliance with Reply Timeframes:
The petitioner highlighted the non-compliance with the rules regarding reply timeframes, specifically referring to Rule 92(3) of the Central Goods and Services Rules, 2017, which mandates a 15-day period for filing a reply. The petitioner pointed out discrepancies in the notice issued, which directed a shorter timeframe for reply, indicating a failure to adhere to the prescribed procedural requirements.

In conclusion, the judgment addressed multiple issues related to the rejection of refund claims under the GST Acts, jurisdiction of the Refund Approval Committee, compliance with procedural requirements, and the denial of refunds based on alleged drawback availment. The detailed analysis provided insights into the legal contentions raised by the petitioner and the grounds for challenging the impugned orders.

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