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TMI Blog2023 (9) TMI 1518X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Section 54 of the CGST Act and the Rule 90 of the CGST Rules, it was held 'in terms of Section 54(1) of the CGST Act, anapplication is required to be made in the prescribed form and manner before two years from the relevant date. It is clear that the petitioner had complied with the said requirement inasmuch as it had filed an application for refund on 31.10.2019 in the form and manner as prescribed in the CGST Act and the CGST Rules. Thus, in terms of Section 54(1) of the CGST Act, the period of limitation would stop running notwithstanding that the proper officer required further documents or material to satisfy himself that the refund claimed was due to the petitioner.' It is therefore clear that time period from the date of filing of the refund claim in Form GST RFD-01 till the date of communication of the deficiency in the Form of GST RFD-03 by the proper officer is required to be excluded from the period of two years, as specified in respect of any such fresh refund claim filed by the applicant after rectification of the deficiency. The insertion of proviso to Rule 90(3) of the CGST Rules is therefore clarificatory in consonance with the objective of Section 54( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for consideration of the proper officer a fresh on merits. Petition allowed. - HONOURABLE MR. JUSTICE BIREN VAISHNAV AND HONOURABLE MR. JUSTICE BHARGAV D. KARIA MR HARDIK P MODH(5344) for the Petitioner(s) No. 1 for the Respondent(s) No. 1,2,3,4 MR DHAVAL D VYAS(3225) for the Respondent(s) No. 3 MR PY DIVYESHVAR(2482) for the Respondent(s) No. 1 NOTICE SERVED BY DS for the Respondent(s) No. 2,4 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) [1] Rule returnable forthwith. Learned advocate Mr. Parth Divyeshvar waives service of notice of Rule for the respondent No. 1 and learned advocate Mr. Dhaval Vyas waives service of notice of Rule for the respondent No. 3. [2] By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs: 12A. This Hon ble Court may be pleased to decalre that para No. 12 to Circular No. 125/44/2019-GST dated 18.11.2019 so far as it relates to directing to file the rectified refund claim within a period of 2 years of the relevant date as defined in Explanation after sub-section 14 of Section 54 of the CGST Act is ultra vires to Section 54 of the CGST Act, 2017; B. this Hon ble Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexures. [3.3] Thereafter, the respondent No. 3 issued deficiency memo in Form RFD-03 on 27th December 2019 as per Rule 90(3) of the CGST Rules by alleging that supporting documents were not attached to the refund application with a remark that Statement-1A filled online was incomplete. [3.4] Since the deficiency memo was issued by the respondent No. 3 against the original refund application, the petitioner had to file a fresh refund application in terms of Rule 90(3) of the CGST Rules and accordingly, the petitioner filed a fresh refund application vide Form RFD-01 on 27th January 2020 for an amount of Rs.1.19 Crores. [3.5] The respondent No. 3 again issued second deficiency memo in Form RFD-03 on 11th February 2020 with the same remark as made in the original refund application alleging that supporting documents were not attached with the refund application with remark of invoice(s) not shown in GSTR-2A but ITC is claimed in Annexure-B as eligible are not uploaded . [3.6] Since the deficiency memo was again issued by the respondent No. 3 against the rectified refund application, the petitioner filed second refund application with the same Annexures as mentioned in the rectified r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant date as defined in Explanation after sub-section (14) of Section 54 of the CGST Act. The respondent No. 4 also placed reliance on the provision of Section 54 of the CGST Act with Rule 90 of the CGST Rules for upholding the order of the adjudicating authority. [4] The relevant extract of Section 54 of the CGST Act subsections (1), (3), (4), (7) are as under: 54. Refund of tax. (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed. * * * (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than (i) zero rated supplies made without payment of tax; (ii) whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication for its completeness and where the application is found to be complete in terms of sub-rule (2), (3) and (4)of rule 89, an acknowledgement in FORM GST RFD-02 shall be made available to the applicant through the common portal electronically, clearly indicating the date of filing of the claim for refund and the time period specified in subsection (7) of section 54 shall be counted from such date of filing. (3) Where any deficiencies are noticed, the proper officer shallcommunicate the deficiencies to the applicant in FORM GST RFD03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies. (4) Where deficiencies have been communicated in FORM GSTRFD-03 under the State Goods and Service Tax Rules, 2017, the same shall also deemed to have been communicated under this rule along with the deficiencies communicated under sub-rule (3). [6] Vide Notification No. 15/2021-Central Tax dated 18th May 2021, the following proviso was inserted after sub-Rule (3) of the Rule 90 of the CGST Rules. The amendment is reproduced as under: Provided that the time period, from the date of filing of the refund claim in FORM GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... memo is issued. Reliance was placed on the decision of the Hon ble Delhi High Court in the case of National Internet Exchange of India vs. Union of India reported in (2023) 9 Centax 405 (Del.), wherein in similar facts, the Hon ble Delhi High Court, after considering the effect of sub-rule (2), (3) and (4) of Rule 89 of the CGST Rules as well as sub-rule (5) of Rule 90 of the CGST Rules held that in terms of Section 54(1) of the CGST Act, an application is required to be made in the prescribed form and manner within two years from the relevant date and once the petitioner has complied with the said requirements, the period of limitation would stop running notwithstanding that the proper officer required further document or material to satisfy himself that the refund claim was due to the petitioner. [7.4] It was, therefore, submitted by learned advocate Mr. Modh that as the petitioner has filed refund claim within the prescribed time limit laid down under Section 54 of the CGST Act, subsequent rectified refund claim along with required documents or prescribed format on directions of the respondent after a period of limitation, as provided in the statute, cannot invalidate the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February 2020 and the petitioner has filed the second rectified application on 13th February 2020. It was, therefore, submitted that in all, 26 (11 + 15) days are required to be excluded from the period of limitation of two years by adding 26 days to last date of 22nd January 2020, therefore, time to file refund claim would be available upto 27th February 2020, however, the second rectified application was filed by the petitioner on 13th February 2020, hence, the refund claim was lodged within a period of limitation. [7.8] For making above submissions, reliance was placed on the Notification No. 15/2021 dated 18th May 2021, whereby proviso to Rule 90(3) of the CGST Rules is introduced for exclusion of interim time period from the date of issuance of defect memo upto the date of filing the rectified refund application for calculating two years from the relevant date by resolving the issue of refund applications. It was, therefore, submitted that the amendment has clarified the intention of the legislature that rectified the refund application is an extension of the original refund application only and both of them are part of the same proceedings. It was submitted that in view of No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenging para 12 of Circular No. 125/44/2019-GST dated 18.11.2019 so far as it relates, directing to file the rectified refund claim within a period of 2 years or the relevant date as defined under the explanation after sub-section 14 of Section 54 of the CGST Act as ultra-vires Section 54 of the CGST Act, 2017 and consequently the refund of unutilized ITC claimed under Inverted Duty Structure in terms of Section 54(3) of the CGST Act, 2017. 5. Pertinently, the petitioner had filed the refund claim for the month of December 2017 only on 16.12.2019. In furtherance thereto, the adjudicating authority issued a deficiency memo to the petitioner on 27.12.2019 under the provisions of Rule 90(3) of the CGST Rules, 2017 with the remarks Supporting documents not attached. Statement -IA is filled online is incomplete . In pursuance thereof, the petitioner filed a revised refund application on 27.1.2020, for which yet again deficiency memo was issued by the authority on 11.2.2020 with the remarks Invoice(s) not shown in GSTR-2A but ITC is claimed in Annexure-B as eligible are not uploaded. 6. The petitioner once again filed a refund application on 13.2.2020. In pursuance thereof, a show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciency memo from the respondents authorities. [10] Such question is considered by the Hon ble Delhi High Court in the case of National Internet Exchange of India (supra), wherein after considering the provisions of Section 54 of the CGST Act and the Rule 90 of the CGST Rules, it was held as under: 18. It is apparent from the above that once an application is complete in terms of Sub-rule (2), (3) and (4) of Rule 89 of the CGST Rules, the same is necessarily required to be accepted. 19. An application can be rejected as deficient only where any deficiencies are noted. The contextual reading of Sub-rule (3) with Sub-rule (2) of Rule 90 of the CGST Rules, indicates that the deficiencies referred to in Sub-rule (2) of Rule 90 of the CGST Rules are those that render an application incomplete in terms of Sub-rules (2), (3) and (4) of Rule 89 as stipulated in Sub-rule (2) of Rule 90. Thus, if an application is complete in terms of Sub-rule (2), (3) and (4) of Rule 89 of the CGST Rules, the same cannot be rejected, relegating the taxpayer to file afresh. In any view of the matter, the period of processing the said application under Subsection (7) of Section 54 of the CGST Act, is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in Bharat Sanchar Nigam Limited v. Union of India Ors.: 2023:DHC:2482-DB and in similar circumstances held as under: 28. We are of the view that Rule 90(3) cannot be applied in the manner as sought to be done by the Adjudicating Authority. Merely because certain other documents or clarifications are sought by way of issuing a Deficiency Memo, the same will not render the application filed by a taxpayer as non est. 29. If the application filed is not deficient in material particulars, it cannot be treated as non est. If it is accompanied by the documentary evidences as mentioned in Rule 89(2) of the Rules, it cannot be ignored for the purposes of limitation. The limitation would necessarily stop on filing the said application. This is not to say that the information disclosed may not warrant further clarification, however, that by itself cannot lead to the conclusion that the application is required to be treated as non est for the purposes of Section 54 of the CGST Act. It is erroneous to assume that the application, which is accompanied by the documents as specified under Rule 89(2) of the Rules, is required to be treated as complete only after the taxpayer furnishes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case where the first deficiency memo dated 27th December 2019 is only for not attaching supportive documents by the petitioner and the first rectified refund application was filed on 27th January 2020 along with requisite documents, as required by the respondents authorities. Thereafter, the second deficiency memo dated 11th February 2020 was issued with the same reasons for providing documents with the remarks invoice(s) not shown in GSTR-2A but ITC is claimed in Annexure-B, for that eligible documents are not uploaded . The petitioner filed second rectified application on 13th February 2020. Thus, the last date for filing the refund application upto December 2019 was extended upto 22nd January 2020 and considering the period of two years, the limitation period of relevant date would be over on 22nd January 2020 and considering 26 days of issuance of deficiency memo by the respondents authorities and adding the limitation for filing rectification application would therefore extend upto 17th February 2020 (22.01.2020 + 26 days = 17.02.2020). But the petitioner has filed the second rectified application on 13th February 2020 and applying the Notification No. 15/2021, re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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