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TMI Blog2024 (8) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides for a contingency of non-compliance with the provisions, the fact that non-compliance with the provisions is or is not visited by some penalty, the serious or the trivial consequences, that flow therefrom, and, above all, whether the object of the legislation would be defeated or furthered . Ordinarily, the use of the term shall is intended to be mandatory but phraseology per se is not the sole determining factor. There are numerous cases where the word shall has been construed as merely directory. Of course, the term raises a presumption that a particular provision is imperative, but such prima facie inference is rebuttable by other considerations such as the object, scope and consequences of such enactment - It also requires to be examined, that where a statute imposes a public duty and lays down the manner in which and the time within which a duty shall be performed, injustice or inconvenience resulting from such rigid adherence to such interpretation must be considered to hold such provisions directory. Thus, on a reading of section 54 of the Act, it appears that the term shall used in the section is directory in nature since any delay beyond the prescribed period of ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The prayer for extension was rejected and ultimately an order in Form RFD 06 dated 24 February 2022 was issued by the respondent no 1 on 24 February 2022. 3. Being aggrieved by the order of rejection, the petitioner filed an appeal before the Appellate Authority which was initially rejected on the ground of delay. By an order dated 8 January 2023 passed an earlier writ petition being WPA 2809 of 2022, a Co-ordinate Bench had remanded the matter to the Appellate Authority with a direction to dispose of the same on merits. 4. Pursuant to the above order, the respondent no 2 considered and rejected the appeal filed by the petitioner and passed an order dated 5 July 2023 on the grounds that on physical verification of the business premises of your petitioner, the premises were found unfit to conduct such business. Moreover, no E-way bill for inward supplies from Ronak Enterprises (GSTIN 19BEWPC3060B1ZN) had been generated. Subsequently, it transpired that in most of the cases the goods transported were not pan masala and where the goods were pan masala there was a mismatch in the values from that disclosed by the petitioner. 5. The principal ground of challenge raised by the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 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) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. (4) The application shall be accompanied by-- (a) such documentary evidence as may be prescribed to establish that a refund is due to the applicant; and (b) such documentary or other evidence (including the documents referred to in section 33) as the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent. as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund. Explanation .--For the purposes of this section, where any order of refund is made by an Appellate Authority, Appellate Tribunal or any court against an order of the proper officer under sub-section (5) of section 54, the order passed by the Appellate Authority, Appellate Tribunal or by the court shall be deemed to be an order passed under the said sub-section (5). Rule 89. Application for refund of tax, interest, penalty, fees or any other amount. (1) Any person, except the persons covered under notification issued under section 55, claiming refund of [any balance in the electronic cash ledger in accordance with the provisions of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orce of this sub-rule, be filed before the expiry of a period of two years from the date on which this sub-rule comes into force.] (2) *** (3) *** (4) *** (5) *** Rule 90. Acknowledgement. (1) Where the application relates to a claim for refund from the electronic cash ledger, 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 sub-section (7) of section 54 shall be counted from such date of filing. (2) The application for refund, other than claim for refund from electronic cash ledger, shall be forwarded to the proper officer who shall, within a period of fifteen days of filing of the said application, scrutinize the application 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 sub-section (7) of section 54 shall be counted from such date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under sub-section (5) of section 54 of the Act is due and payable to the applicant, he shall make an order in FORM RFD-06 sanctioning the amount of refund to be paid, in cash, proportionate to the amount debited in cash against the total amount paid for discharging tax liability for the relevant period, mentioning therein the amount adjusted against any outstanding demand under the Act or under any existing law and the balance amount refundable and for the remaining amount which has been debited from the electronic credit ledger for making payment of such tax, the proper officer shall issue FORM GST PMT-03 recrediting the said amount as Input Tax Credit in electronic credit ledger.] (2) Where the proper officer or the Commissioner is of the opinion that the amount of refund is liable to be withheld under the provisions of sub-section (10) or, as the case may be, sub-section (11) of section 54, he shall pass an order in [Part A] of FORM GST RFD-07 informing him the reasons for withholding of such refund. [ Provided that where the proper officer or the Commissioner is satisfied that the refund is no longer liable to be withheld, he may pass an order for release of withheld refund i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) submit additional documents or reply; and (b) any period of time taken either by the applicant for furnishing the correct details of the bank account to which the refund is to be credited or for validating the details of the bank account so furnished, where the amount of refund sanctioned could not be credited to the bank account furnished by the applicant. 8. It is always a question of interpretation whether a provision in a statute is mandatory or directory. This depends upon the intent of the legislature. The intention of legislature is to be ascertained not only by the phraseology of the relevant provision, but also by the context, the subject matter and object of the relevant provision. In ascertaining the real intention of the Legislature, the Court considers inter alia, the nature and the design of the statute and the consequences which follow from construing it the one way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstances, namely, that the statute provides for a contingency of non-compliance with the provisions, the fact that non-compliance with the provisions is or is not visi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des for interest on delayed refunds. On the other hand, failure to pass any order within the specific period of time does not defeat, nullify nor prejudice the purpose or object behind enactment of the section. The injustice and inconvenience resulting from such rigid adherence to the statutory prescription is also a relevant factor in holding that the above provision is merely directory. Any other construction would defeat the object of the section. 12. Significantly, the above period in consideration being the date of refund application and 24 February 2022 being the date of passing of the order for rejection was governed by the Notification dated 5 July, 2022 issued by the Department which gave an exemption to all tax payers for filing belated refund claims and excluded the period from March 1, 2020 to 28 February, 2022. An extension of time was also granted by the Goods and Service Tax Department for passing orders under section 73 and section 74 of the Act. Admittedly, the given period witnessed the peaks of the Pandemic and effects of the Omicron wave across the world. By an order dated 10 January 2022, passed in Writ Petition (C) No 3 of 2020 , the Hon ble Supreme Court had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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