2024 (4) TMI 282 - HC - GST

Appeal rejected on the ground of delay - Refund of unutilised input tax credit - difference between the value of exports as mentioned in the invoice and the shipping bill - HELD THAT - On perusal of Rule 108 of Central Goods Service Tax Rules, 2017, it is clear that the petitioner is required to submit decision or order appealed against within seven days of filing of appeal under sub-rule (1) and final acknowledgment indicating appeal number is to be issued in Form GST APL-02 by the appellate authority. Therefore, literally applying Rule 108(3) by the appellate authority was justified in rejecting the appeals on the ground of delay. As the GST Council has agreed to recommendations of the Law Committee which provides that when an order which is appealed against is issued or uploaded on the common portal and the same can be viewed by the appellate authority, requirement of submission by the appellant of a certified copy of such an uploaded order to vouch for its authenticity would be insignificant in view of availability of the order online. Therefore, considering such recommendation, amendment which is clarificatory in nature, has come into effect from 26th December, 2022 on the statute - In view of the above amendment which would have a retrospective effect as the same is a clarificatory in nature and therefore, the impugned order passed by the appellate authority rejecting the appeal on the ground of delay would not survive. The impugned order is, accordingly, quashed and set aside and the matter is remanded back to the appellate authority to pass a fresh de novo order on merits after giving opportunity of hearing to the petitioner. Petition disposed off by way of remand.

Summary

Issues Involved:
1. Rejection of refund claim due to discrepancies between invoice and shipping bill.
2. Delay in submission of certified copies of Order-in-Original for appeals.
3. Applicability and interpretation of Rule 108(3) of the CGST Rules.
4. Retrospective effect of the amendment in Rule 108(3) based on GST Council recommendations.

Summary:

Issue 1: Rejection of Refund Claim
The petitioner, engaged in the manufacture and export of pharmaceuticals, sought a refund of unutilized input tax credit u/s 16 of the IGST Act. The adjudicating authority issued a show-cause notice due to discrepancies between the invoice and shipping bill values and subsequently sanctioned only a partial refund, rejecting the rest.

Issue 2: Delay in Submission of Certified Copies
The petitioner filed appeals online u/s 107 of the CGST Act but submitted the certified copies of the Order-in-Original late. The appellate authority calculated delays ranging from 71 to 106 days and rejected the appeals based on this delay, as stipulated by Rule 108(3) of the Rules.

Issue 3: Applicability and Interpretation of Rule 108(3)
The petitioner argued that Rule 108(3) should not apply since the appeals were filed online based on orders uploaded by the adjudicating authority. The appellate authority, however, adhered strictly to Rule 108(3) and Circular No.157 dated 20th July 2021, which mandated the submission of certified copies within seven days.

Issue 4: Retrospective Effect of Amendment in Rule 108(3)
The court considered the Minutes of the 48th GST Council Meeting, which recommended amendments to Rule 108 to clarify that if an order is uploaded on the common portal, the submission of a certified copy becomes insignificant. This amendment, being clarificatory, was deemed to have retrospective effect.

Judgment:
The court quashed the appellate authority's order rejecting the appeals on the ground of delay. It held that the amendment to Rule 108(3) has retrospective effect and thus, the impugned order does not survive. The matter was remanded back to the appellate authority for a fresh de novo order on merits, with instructions to complete the exercise within 12 weeks from the receipt of the court's order. The court did not address the merits of the refund claim, leaving it to the appellate authority to decide after giving the petitioner an opportunity for a hearing. The petitions were disposed of with no order as to costs.