The Delhi High Court ruled that A GST refund application cannot be deemed invalid if it contains all material particulars.
Facts
The petitioner has filed the petition impugning an order passed by the Additional Commissioner CGST Appeals-II (the Appellate Authority), whereby the petitioner’s appeal against an order passed by the Adjudicating Authority was rejected. In addition, the petitioner impugns the validity of Rule 90(3) of the Central Goods and Services Tax Rules, 2017. The petitioner also assails Paragraph 12 of Circular No. 125/44/2019 dated 18.11.2019 as being ultra vires Section 54 of the Central Goods and Services Tax Act, 2017.
The petitioner was essentially aggrieved by the denial of his request for refund of GST.
Submissions
Advocate Kamal Sawhney, appearing for the petitioner, contended that it was open for the respondents to seek any documents required for clarification relating to the refund claim made by a taxpayer, however, the taxpayer’s application cannot be considered as deficient if it was duly accompanied by the documents prescribed under Rule 89(2).
Decision
The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan viewed 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.
The court said that 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 court further added that 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 clarification of further documents as may be required by the proper officer and that too from the date such clarification is issued” the court said.
The bench set aside the order passed by the Appellate Authority and the Adjudicating Authority.
Case title: Bharat Sanchar Nigam Limited V/S Union Of India & Ors.
Citation: W.P.(C) 3550/2023
