2025 (4) TMI 309 - HC - GST

Refund of IGST paid by the Petitioner on the export of the pharmaceutical products made by it during the period from 1st July 2017 to 30th April 2018 - HELD THAT - It is not in dispute that the Petitioner is entitled to the refund as mentioned in the order passed on 15th March 2024. This is also admitted by the Respondents in their affidavit in reply. It appears that there is some technical glitch in processing this refund as mentioned in the affidavit in reply. However this technical glitch cannot deny the Petitioner the right to receive the refund. The Respondents are directed to process the refund of the Petitioner manually and grant the same within a period of two weeks from today as ordered by the Refund Sanctioning Order dated 15th March 2024. Petition disposed off.

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

Whether the Petitioner is entitled to the refund of the Integrated Goods and Services Tax (IGST) paid on the export of pharmaceutical products for the period from 1st July 2017 to 30th April 2018.
Whether the technical issues on the GST Portal can be a valid reason for the Respondents to withhold the refund due to the Petitioner.
Whether the Petitioner is entitled to interest on the delayed refund, and if so, how this should be addressed given the pending appeal before the 1st Appellate Authority.

ISSUE-WISE DETAILED ANALYSIS

Entitlement to IGST Refund

Relevant Legal Framework and Precedents: The Petitioner sought a refund based on the Refund Sanctioning Order dated 15th March 2024, which acknowledged the Petitioner's entitlement to a refund of Rs. 1,40,34,577/-.
Court's Interpretation and Reasoning: The Court noted that the entitlement to the refund was not disputed by the Respondents, as confirmed in their affidavit. The issue was purely procedural, involving a technical glitch in processing the refund on the GST Portal.
Key Evidence and Findings: The Court relied on the Refund Sanctioning Order and the Respondents' admission in their affidavit acknowledging the Petitioner's entitlement to the refund.
Application of Law to Facts: The Court determined that the technical issues on the GST Portal should not impede the Petitioner's right to receive the refund. The Court directed the Respondents to process the refund manually.
Treatment of Competing Arguments: The Petitioner argued that despite the technical issues, the refund should be processed manually. The Respondents acknowledged the entitlement but cited procedural difficulties. The Court sided with the Petitioner, emphasizing the right to the refund over procedural hurdles.
Conclusions: The Court concluded that the refund should be processed manually within two weeks, as per the Refund Sanctioning Order.

Interest on Delayed Refund

Relevant Legal Framework and Precedents: The issue of interest on delayed refunds is typically governed by statutory provisions concerning tax refunds and related appeals.
Court's Interpretation and Reasoning: The Court chose not to opine on the issue of interest since the Petitioner's appeal regarding interest was pending before the 1st Appellate Authority.
Key Evidence and Findings: The Petitioner had already filed an appeal challenging the denial of interest on 28th May 2024.
Application of Law to Facts: The Court deferred the matter of interest to the 1st Appellate Authority, recognizing the ongoing appeal process.
Treatment of Competing Arguments: The Court acknowledged the Petitioner's challenge regarding interest but refrained from making a determination, respecting the appellate process.
Conclusions: The issue of interest is to be decided by the 1st Appellate Authority based on its merits and in accordance with the law.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "Considering these facts and circumstances, we hereby direct the Respondents to process the refund of the Petitioner manually and grant the same within a period of two weeks from today as ordered by the Refund Sanctioning Order dated 15th March 2024."
Core Principles Established: The Court established that procedural technicalities, such as glitches in the GST Portal, should not obstruct the substantive right to tax refunds.
Final Determinations on Each Issue: The Court ordered the manual processing of the refund within two weeks and deferred the issue of interest to the 1st Appellate Authority for determination.

The Court concluded its judgment by making the rule absolute in the terms stated and disposed of the Writ Petition with no order as to costs. The matter was also scheduled for compliance reporting on 17th April 2025 to ensure adherence to the Court's directive. The order was to be digitally signed and acted upon by all concerned parties.

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