2023 (12) TMI 1102 - HC - GST

Denial of refund of unutilised input tax credit (ITC) accumulated in respect of the Goods and Services Tax paid on inputs - zero-rated supplies - period from July 2017 to March 2018 - petitioner s application for refund rejected on the ground that it was filed beyond the period of two years as specified under Section 54(1) of the Central Goods and Services Tax Act, 2017 - HELD THAT - A plain reading of Sub-section (1) of Section 54 of the CGST Act indicates that any person who is claiming a refund of tax or interest, if any, paid on the amount is entitled to make an application before the expiry of two years from the relevant date and in such form and manner as may be prescribed. The term relevant date has been defined in Explanation (2) to Section 54 of the CGST Act - There is no cavil that the petitioner was required to make an application for refund under Sub-section (1) of Section 54 of the CGST Act within two years of the goods leaving India or crossing its territorial frontiers. The controversy essentially revolves around whether the petitioner did make an application within the period and/or was prevented from doing so. It is not disputed that at the material time, there was confusion regarding the implementation of the Goods and Services Tax regime which had been rolled out - In the present case, there is no dispute that the petitioner had attempted to upload its application for refund but could not do so on account of technical glitches - it is difficult to accept that the petitioner s legitimate right to seek refund could be foreclosed on account of such technical glitches. There is no dispute that the petitioner had attempted to file an application for refund on the GST portal twice but its application could not be uploaded on account of technical glitches. It is not disputed that the petitioner had also made a complaint and a ticket for the same was also raised. It cannot be accepted that the petitioner s claim for refund is required to be denied on the ground of delay - the proper officer is directed to examine the petitioner s claim for refund and process the same, if it is found that the petitioner is entitled to the same. Petition allowed.

Summary

Issues Involved:
1. Denial of refund of unutilised input tax credit (ITC).
2. Application of the two-year limitation period under Section 54(1) of the CGST Act.
3. Technical glitches in the GST portal affecting the filing of refund applications.
4. Manual filing of refund applications under Rule 97A of the CGST Rules.
5. Bona fide attempts and guidance by jurisdictional GST officers.

Summary:

1. Denial of Refund of Unutilised ITC:
The petitioner was aggrieved by the denial of refund of unutilised ITC accumulated in respect of GST paid on inputs for zero-rated supplies (goods exported without payment of IGST) during July 2017 to March 2018. The Proper Officer rejected the refund application on 11.03.2020, citing it was filed beyond the two-year period specified under Section 54(1) of the CGST Act. This decision was upheld by the Appellate Authority on 06.08.2021.

2. Application of the Two-Year Limitation Period:
The petitioner's application for refund was rejected for being filed beyond two years from the relevant date of export. The Proper Officer determined the relevant dates based on the export dates of the consignments, concluding that the refund claim should have been filed by September 2019 for exports made between July 2017 and March 2018.

3. Technical Glitches in the GST Portal:
The petitioner encountered technical errors while attempting to file refund applications on 14.05.2018 and 08.08.2018. Despite filing a complaint and receiving a ticket, the petitioner was unable to complete the online filing process. The petitioner argued that the authorities ignored these technical glitches, which were beyond his control.

4. Manual Filing of Refund Applications under Rule 97A:
Rule 97A of the CGST Rules, introduced on 15.11.2017, allowed for manual filing of applications. The petitioner claimed he was advised by jurisdictional GST officers to wait until filing the annual GST Returns in Form 9 and obtaining Bank Realisation certificates before filing the refund application, which he did on 05.02.2020.

5. Bona Fide Attempts and Guidance by GST Officers:
The Court acknowledged the transition difficulties during the GST regime rollout and accepted that the petitioner made bona fide attempts to file the refund application. The Court noted that the petitioner's legitimate right to seek a refund should not be foreclosed due to technical glitches and the guidance he received from GST officers.

Conclusion:
The Court directed the proper officer to examine and process the petitioner's refund claim, recognizing the bona fide efforts made by the petitioner and the technical issues faced. The petition was allowed, emphasizing that the petitioner's claim could not be denied on the ground of delay under the peculiar facts of the case.