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2023 (5) TMI 588 - HC - GSTRefund of GST - only reason assigned by the Appellate Authority to declare the sanction for refund as illegal is that declarations were not signed in physical mode before it could be scanned and uploaded through electronic mode - HELD THAT - A reading of the provisions of Rule 89 of the CGST Rules of 2017 would show that there is no specific requirement that the declaration must necessarily be signed in physical mode. A conjoint reading of the provisions contained in Rule 26 and Rule 89 of the CGST Rules of 2017 leaves no manner of doubt that as far as requirement of law is concerned, it does not mandate that even after having authenticated a document in the manner prescribed under Rule 26 of the CGST Rules of 2017, insofar as declarations (as sought in the present case) are concerned, they are also required to be signed in physical mode before being scanned and uploaded through electronic submission along with the application for refund. It appears that by administrative instructions, i.e. Circular dated 18.11.2019 (Annexure-10), such requirement has been added. Though non-submission of refund application along with the declarations as required under the law would certainly be illegal and that may, in appropriate case, entail rejection of the application, however, if declarations, as in the present case, are digitally authenticated in the manner prescribed under Rule 26 of the CGST Rules of 2017, non-submission of physically signed and scanned declarations may only be an irregularity, but not an illegality. The impugned order passed by the Appellate Authority upsetting the order of refund passed by the Adjudicating Authority is not sustainable in law. Therefore, impugned order rejecting claim of refund and depriving the petitioner of the refund to which it may be entitled, without any authority of law, cannot be allowed to be sustained - Petition allowed.
Issues involved:
The issues involved in the judgment are related to the refund application filed by the petitioner under the Central Goods and Services Tax Act, 2017 (CGST Act of 2017) for the period July, 2020. The dispute arises from the rejection of the refund claim by the Appellate Authority based on the contention that the declarations and undertakings attached to the application were not physically signed before being scanned and uploaded electronically. Summary: Issue 1: Refund application and sanctioning of refund The petitioner filed a refund application under the CGST Act of 2017, which was initially sanctioned by the Adjudicating Authority. However, the Competent Authority later reviewed the refund order and found discrepancies in the signed declarations, leading to the claim being deemed improper. Issue 2: Appeal by the respondent-department Subsequently, the respondent-department filed an appeal under Section 107 of the CGST Act of 2017, arguing that the refund claim was erroneously sanctioned by the Adjudicating Authority. Issue 3: Decision of the Appellate Authority The Appellate Authority, in its order, declared the refund claim and the Adjudicating Authority's decision as improper and illegal due to the lack of physical signatures on the declarations attached to the refund application. Issue 4: Judicial review and legal arguments The petitioner challenged the Appellate Authority's decision before the High Court, arguing that while the declarations were digitally signed, there was no legal requirement for physical signatures before uploading them electronically. The respondents contended that physical signatures were necessary as per administrative instructions. Judgment: The High Court held that the Appellate Authority's decision to reject the refund claim was not legally sustainable. The Court emphasized that while non-submission of required documents may be illegal, the absence of physically signed declarations, when digitally authenticated, constituted an irregularity, not an illegality. The Court reinstated the Adjudicating Authority's refund order, allowing the petitioner to claim the refund rightfully due to them. The Court concluded that administrative instructions cannot override legal requirements for refund claims under the CGST Act of 2017.
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