2025 (4) TMI 422 - HC - GST

Refund claim - only ground on which refund is rejected is that the Appellate Authority has not specifically mentioned the amount of refund to be granted to the Petitioner - HELD THAT - The ground of rejection is factually incorrect. The order of the Appellate Authority has mentioned the amount of refund. The impugned order dated 01.06.2023 passed by Respondent No. 2 rejecting the refund of the Petitioner is quashed and set aside. Respondent No. 2 is directed to grant the refund of Rs. 96, 65, 325/- along with interest @ 6% per annum from the date immediately after the expiry of sixty days from the date of receipt of the application i.e. 12.09.2021 till the date of actual refund in terms of Section 56 of the CGST Act. Petition disposed off.

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

Whether the rejection of the refund claim by Respondent No. 2 was justified based on the allegation that the Petitioner was not conducting business from its principal place of business.
Whether the Appellate Authority's order adequately specified the refund amount to be granted to the Petitioner.
The procedural requirements for the Petitioner to obtain the refund following the Court's decision.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Justification of Refund Rejection

Relevant legal framework and precedents: The rejection of the refund was initially based on the assertion that the Petitioner was not conducting business from its principal place of business, as required under the Central Goods and Service Tax Act, 2017 ("CGST Act").
Court's interpretation and reasoning: The Court found that the basis for rejection was not sustainable since the verification conducted by Mr. Vikas Jadhav, a State Officer, confirmed that the Petitioner was indeed operating from the principal place of business.
Key evidence and findings: The visit report by Mr. Jadhav, documented in Form GST Reg-30, confirmed the business operations at the principal place and the correctness of the documents related to the refund process.
Application of law to facts: The Court applied the provisions of the CGST Act, specifically Section 56, which governs the entitlement to interest on delayed refunds, and determined that the Petitioner was entitled to the refund.
Treatment of competing arguments: The Respondent's argument that the Petitioner was not conducting business from the principal place was dismissed based on the factual verification.
Conclusions: The rejection of the refund on the grounds of not conducting business was deemed unjustified, and the Petitioner was entitled to the refund.

Issue 2: Specification of Refund Amount by Appellate Authority

Relevant legal framework and precedents: The Appellate Authority's order was scrutinized to verify whether it specified the refund amount, which is a critical aspect under the CGST Act for processing refunds.
Court's interpretation and reasoning: The Court found that the Appellate Authority had indeed specified the refund amount, contrary to the Respondents' claim.
Key evidence and findings: The Court referred to the order of the Appellate Authority, which clearly mentioned the refund amount, thus refuting the Respondents' assertion.
Application of law to facts: The Court applied the legal requirement for clear specification of refund amounts and found that the Appellate Authority's order met this requirement.
Treatment of competing arguments: The Respondents' argument that the refund amount was not specified was rejected based on the documentary evidence.
Conclusions: The Court concluded that the Appellate Authority's order was clear and specific regarding the refund amount, and thus, the rejection on this ground was unfounded.

Issue 3: Procedural Requirements for Refund Post-Judgment

Relevant legal framework and precedents: The procedural aspect involves the filing of a fresh refund application as per the Court's directive and the CGST Act.
Court's interpretation and reasoning: The Court directed the Petitioner to file a fresh refund application on the Respondents' portal to facilitate the refund process.
Key evidence and findings: The Court's directive was based on the submissions made by the Respondents, indicating the need for a fresh application to process the refund.
Application of law to facts: The Court's decision to require a fresh application was a procedural step to ensure compliance with the administrative process for refunds.
Treatment of competing arguments: The procedural requirement for a fresh application was not contested, as it was a standard administrative process.
Conclusions: The Court mandated the filing of a fresh refund application to expedite the refund process in accordance with the CGST Act.

SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "The ground on which refund is rejected is otherwise not sustainable. The only ground on which refund is rejected is that the Appellate Authority has not specifically mentioned the amount of refund to be granted to the Petitioner. This is factually incorrect."
Core principles established: The judgment reinforces the principle that factual verification of business operations is paramount in determining entitlement to tax refunds, and that clear specification of refund amounts by appellate authorities is essential.
Final determinations on each issue: The Court quashed the impugned order rejecting the refund, directed the Respondent to grant the refund with interest, and outlined the procedural steps for the Petitioner to obtain the refund.