2021 (2) TMI 766 - HC - GST

Default in submission of GST returns - E-Way Bill (EWB) generation facility of the petitioner blocked on the EWB Portal in the event the petitioner fails to file their GSTR 3B returns for two financial years being 2018-19 and 2019-20 - Rule 138 E (b) of the CGST Rules 2017 - petitioner takes a stand that as because the amount has not been refunded to the petitioner therefore the petitioner had defaulted in submitting the GST returns for the aforesaid two financial years - HELD THAT - We are not very much impressed with the said submission of the petitioner by linking up a refund being entitled to them under some other provisions of law and the requirement of law to submit their tax returns. We are also of the view that the same stand of the petitioner cannot bestow a legal right upon them not to pay the required GST under the law or not to submit their returns for two given financial years. But at the same time if the petitioner is of the view that as because an amount of Rs. 14, 42, 51, 265/- had not been refunded to them and the requirement of tax to be paid by them is a small amount compared to the refund they are entitled and therefore they are unable to pay it we are of the view that the interest of justice would be met if the respondents being the Principal Commissioner GST North-eastern Region would examine the matter and pass a reasoned order on the entitlement of the petitioner for a refund. The petitioner accordingly shall forthwith submit a representation before the Principal Commissioner GST claiming and justifying the reasons for the refund as indicated above and in the event such representation is submitted the Principal Commissioner shall pass a reasoned order thereon within a period of 10(ten) days from the date of submission of such representation. In doing so the Principal Commissioner may also give a hearing to the petitioner. Upon considering the representation the Principal Commissioner may pass a reasoned order on the entitlement of the petitioner for such refund within a period of ten days from the date of submission of the representation - Till such order is passed by the Principal Commissioner the earlier interim order dated 14.10.2020 requiring the respondents not to block the EWB Portal of the petitioner shall continue. In the event the representation is not submitted within a period of three days from today the continuation of the interim order shall no longer hold. Petition disposed off.

Summary

Issues:
1. Blocking of E-Way Bill (EWB) generation facility for failure to file GSTR 3B returns.
2. Entitlement to refund under the new Industrial Policy resolution and its impact on GST returns.

Analysis:
1. The petitioner's E-Way Bill generation facility was threatened to be blocked by the GST Department for failing to file GSTR 3B returns for two consecutive financial years. The petitioner argued that they were entitled to a substantial refund under the new Industrial Policy resolution, which had not been refunded to them, leading to their default in filing GST returns. However, the court found this argument unconvincing, stating that entitlement to a refund does not absolve the petitioner from fulfilling their tax obligations. The court directed the Principal Commissioner, GST, to examine the petitioner's refund claim and pass a reasoned order within ten days, allowing the petitioner to submit a representation justifying their refund claim.

2. The court emphasized that the petitioner must submit the representation to the Principal Commissioner within three days, failing which the interim order preventing the blocking of the EWB Portal would be lifted. The judgment solely focused on the refund claim issue and directed the Principal Commissioner to decide on the petitioner's entitlement to the refund promptly. The court clarified that no other aspect of the case was being decided, and the writ petition was disposed of based on the requirement for the Principal Commissioner to adjudicate on the refund claim promptly.