2020 (5) TMI 194 - HC - GST

Refund of IGST - supplies made to SEZ Units - rejection on the ground that there were certain deficiencies in the claim made for the refund and advising the petitioner to rectify his refund application - Deficiency Memo in RFD-03 dated 05.01.2019 issued or not - HELD THAT - Sri M. Govind Reddy, the Special Counsel for Commercial Taxes, does not deny that in the impugned order passed by the respondent No.1 there is no reference to the petitioner s letter dated 09.02.2019 given to the Deficiency Memo dated 05.01.2019 issued by the respondent No.1. The matter is remitted back to the respondent No.1 to consider the petitioner s refund application dated 06.10.2018 as well as letter dated 09.02.2019 and annexures thereto and then pass a reasoned order within four (4) weeks from the date of receipt of a copy of this order. - Petition allowed by way of remand.

Summary

Issues:
1. Refund rejection order challenge based on deficiencies in the claim.
2. Lack of consideration of petitioner's reply and supporting material.
3. Remand for reconsideration of refund application.

Analysis:
The petitioner, an entity engaged in manufacturing and selling Ready-Mix Concrete, challenged the refund rejection order dated 20.11.2019, alleging deficiencies in the claim made for the refund. The supplies were made to SEZ Units in the financial year 2017-18 without payment of GST initially due to a misunderstanding regarding the submission of the Letter of Undertaking. However, the petitioner rectified the mistake by paying IGST in December 2017 with applicable interest and filed a refund application seeking refund of IGST on supplies made to SEZ Units in December 2017.

The competent authority, respondent No.1, issued a Deficiency Memo alleging deficiencies in the claim and advised the petitioner to rectify the refund application. The petitioner responded by clarifying the deficiencies and submitting supporting material, which was acknowledged by the respondent's office. Despite this, the refund claim was rejected on 20.11.2019 without considering the petitioner's reply and the material filed in response to the Deficiency Memo.

The court noted that the impugned order failed to reference the petitioner's reply to the Deficiency Memo, as admitted by the Special Counsel for Commercial Taxes. Consequently, the court allowed the writ petition, setting aside the refund rejection order and remitting the matter back to the respondent No.1 for reconsideration of the petitioner's refund application and the accompanying letter and annexures. The respondent was directed to pass a reasoned order within four weeks from the date of receipt of the court's order.

In conclusion, the court's decision to set aside the refund rejection order and remand the matter for reconsideration addresses the key issues of deficiencies in the claim, lack of consideration of the petitioner's response, and the need for a reasoned order in compliance with the law.