2022 (9) TMI 664 - HC - GST

Refund of IGST paid on Zero rated supplies - Petitioner claims to have informed the Department that they have already filed refund application for the tax periods February 2019 to August 2019 and the said applications were filed manually on 21.08.2019 due to non-availability of electronic refund module - applicability of Circular No. 125/44/2019-GST, dated 18.11.2019, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing - HELD THAT - The Writ Petition is disposed of directing the Petitioner to make a fresh application for refund claim enclosing necessary supporting documents in terms of Circular No. 125/44/2019- GST, dated 18.11.2019, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing, within a period of three 03 weeks from today. In which event, the authorities shall dispose of the same on merits and in accordance with law as early as possible, preferably within a period of Three weeks thereafter.

Issues:
1. Seeking quashing of orders related to refund claims under CGST Act, 2017.
2. Dispute regarding submission of physical copies of refund applications.
3. Allegation of violation of natural justice principles in processing refund claims.
4. Resolution of the matter through fresh application for refund.

Analysis:

Issue 1: Seeking quashing of orders related to refund claims under CGST Act, 2017
The petitioner filed a Writ Petition seeking to quash certain orders related to refund claims under the CGST Act, 2017. The petitioner, engaged in manufacturing and export of pharmaceutical products, claimed entitlement to refunds for IGST paid on zero-rated supplies to an SEZ unit. The dispute arose due to the process of filing refund applications manually initially, followed by a requirement to file electronically. The petitioner contended that they had already filed refund applications manually before the electronic system was mandated. The respondents disputed these claims, leading to a legal challenge seeking the relief of quashing the impugned orders.

Issue 2: Dispute regarding submission of physical copies of refund applications
A significant contention in the case was the dispute over the submission of physical copies of refund applications. The respondents argued that the petitioner failed to submit physical copies of the applications, leading to rejection of the claims. The counter filed by the respondents highlighted the importance of submitting all relevant documents physically along with the electronic filing for processing refund applications. This discrepancy in submission methods resulted in a lack of clarity and adherence to the prescribed procedures, leading to the rejection of the refund claims.

Issue 3: Allegation of violation of natural justice principles in processing refund claims
The petitioner alleged a violation of natural justice principles in the processing of their refund claims. They claimed that despite attempts to inform the department about the manual filing of applications due to system constraints, their claims were rejected without proper communication. The respondents, on the other hand, argued that the petitioner did not adhere to the prescribed procedures, specifically regarding the submission of physical copies of refund applications. The lack of physical documentation was cited as a reason for the rejection of the claims, with the respondents asserting that the principles of natural justice were not violated in this case.

Issue 4: Resolution of the matter through fresh application for refund
Ultimately, the parties agreed to resolve the matter by having the petitioner file a fresh application for refund in accordance with Circular No. 125/44/2019-GST. The court directed the petitioner to submit the fresh application with necessary supporting documents within three weeks. It was agreed that the authorities would then process the application on its merits and in accordance with the law, aiming for a prompt resolution within three weeks thereafter. This resolution through a fresh application aimed to address the procedural discrepancies and ensure a fair consideration of the refund claim.

In conclusion, the High Court of Andhra Pradesh disposed of the Writ Petition with the direction for a fresh refund application, emphasizing adherence to prescribed procedures and timely resolution of the refund claim in accordance with the law.

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