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2023 (7) TMI 1007 - HC - GSTRefund of Input Tax Credit (ITC) relating to input services - export of education services - Zero Rated Supplies in terms of Section 16 of the Integrated Goods Services Tax Act, 2017 - non-issuance of notice - periods April, 2018 to August, 2018 and October, 2018 to March, 2019. HELD THAT - There is a fundamental error in the manner in which the petitioner s refund applications have been processed - Admittedly, the concerned authority had not issued any notice as required under Rule 92(3) of the Central Goods and Services Rules, 2017 (CGST Rules), setting out the reasons for rejection of the refund. The petitioner, thus, had no opportunity to satisfy the concerned authorities as to its claim for refund to the extent it has been rejected. It is considered apposite to set aside the impugned order as well as the refund rejection orders to the extent, the same reject the refund claims made by the petitioner - the petition is disposed of.
Issues involved:
The petitioner's claim for refund of Input Tax Credit (ITC) relating to input services was rejected by the Appellate Authority, leading to the present petition challenging the Order-in-Appeal. Details of the judgment: Issue 1: Rejection of refund of ITC for specific periods The petitioner, engaged in software and education technology services, exported services to seventy countries without GST payment, claiming entitlement to refund of ITC. The rejection of refund for the periods April 2018 to August 2018 and October 2018 to March 2019, specifically related to CAM charges and certain invoices not furnished, formed the basis of the petitioner's grievance. Issue 2: Refund claims and accumulated ITC The petitioner filed eleven refund claims totaling &8377;2,41,98,274 for accumulated ITC on Zero Rated Supplies. The rejection of a portion of the refund amount by the concerned authority, citing CAM charges and catering charges, led to subsequent appeals under the CGST Act. Issue 3: Applicability of CGST Act provisions The Appellate Authority's rejection of the petitioner's refund appeals on the grounds of ineligibility under Section 16 of the CGST Act lacked clear reasoning. The absence of discussion on the applicability of Section 17(5)(b) to CAM charges and catering charges raised concerns about the decision-making process. Issue 4: Procedural errors in refund processing The High Court noted a fundamental error in processing the petitioner's refund applications, highlighting the failure to issue a notice as required by Rule 92(3) of the CGST Rules. This omission deprived the petitioner of an opportunity to address the reasons for the rejection of the refund claims. Judgment Outcome: In light of the procedural irregularities and lack of clarity in the Appellate Authority's decision, the High Court set aside the impugned order and refund rejection orders. The concerned authority was directed to issue a fresh notice outlining reasons for rejecting the refund claims, allowing the petitioner to respond in accordance with Rule 92(3) of the CGST Rules. The judgment emphasized the need for a fair and informed decision-making process, preserving the rights and contentions of all parties involved.
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