2024 (7) TMI 416 - HC - GST

Processing of manual refund application - HELD THAT - It is noted that when there are genuine issues, the Department should be more liberal particularly in view of the fact that no party will intentionally delay filing the refund application or not file the refund application in the portal when it has to receive a substantial amount as refund. The Department needs to avoid unwarranted litigation on such issues and make the system more assessee friendly. Such approach would also foster the interest of Revenue in collection of taxes. In the facts and circumstances of this case, technicalities ought not to come in the way of the assessee. Petition disposed off.

Summary

Issues:
1. Writ of certiorari or mandamus regarding an Impugned Appellate Order dated 17.9.2021.
2. Interpretation of Rule 97A of the CGST Rules and its application to manual filing and processing of applications for refund.
3. The binding nature of statutory rules over instructions issued by the Board under section 168 of the CGST Act.
4. Departmental approach towards genuine issues and taxpayer-friendly system.

Analysis:

1. The petition sought a writ of certiorari or mandamus concerning an Impugned Appellate Order dated 17.9.2021. The Court granted both prayers based on a previous order in Laxmi Organic Industries Ltd. v/s. Union of India, emphasizing the importance of Rule 97A in the CGST Rules.

2. Rule 97A, inserted in the CGST Rules, allows manual filing and processing despite provisions for electronic filing. The Court clarified that Rule 97A overrides rules 89 to 97 of Chapter X, ensuring that manual filing is permissible. The judgment highlighted that the impugned circular cannot supersede or undermine the statutory rule of Rule 97A.

3. The Court reaffirmed that officers must adhere to statutory rules, like Rule 97A, even when instructions are issued by the Board under section 168 of the CGST Act. It emphasized that statutory rules take precedence over instructions, ensuring proper discharge of public duties without ignoring established rules.

4. The Court urged the Department to adopt a more liberal and taxpayer-friendly approach, especially in cases involving genuine issues. It emphasized the need to avoid unnecessary litigation and promote a system that is conducive to taxpayers. The judgment stressed that technicalities should not hinder genuine refund claims, advocating for a balanced approach that serves both taxpayers and revenue interests.

In conclusion, the Court disposed of the petition, addressing the issues raised regarding the Impugned Appellate Order, the interpretation of Rule 97A, the hierarchy between statutory rules and Board instructions, and the importance of a taxpayer-friendly system in tax administration.