Regal Engineers & Contractors Pvt Ltd Vs Assistant Commissioner of CGST & CE
Date: October 13, 2024
Subject Matter
GST Authorities to Process Time-Barred Refund Application Due to Department's Delay
Summary
This writ petition was filed by a civil contractor, a registered GST dealer, to challenge the respondent's failure to process a refund application filed on February 22, 2018. The refund claim of Rs. 4,95,073/- was for IGST paid on a supply of goods to a Special Economic Zone (SEZ) unit in October 2017, which qualifies as a zero-rated supply under Section 16 of the IGST Act.
The petitioner filed the refund application within the two-year statutory period as required by Section 54 of the CGST Act. However, for over a year, there was no response from the respondent, even after a reminder was sent on March 29, 2019. The petitioner then ceased following up. It was only on May 26, 2023, after the petitioner sent another request, that the respondent informed them of a "Deficiency Memo" dated April 12, 2019, which the petitioner claims was never received. When the petitioner's representative approached the department to rectify the deficiencies, they were told that the time limit for processing the application had expired.
The respondent's counsel argued that the petitioner's application was not processed because the deficiencies in the memo were not rectified in time.
The High Court observed that the petitioner had initially filed the application well within the stipulated time, but the respondent had failed to process it for more than a year. The court noted that the petitioner's claim of not receiving the deficiency memo was not successfully rebutted. The court concluded that it would be appropriate to direct the respondent to process the refund application without insisting on the limitation aspect.
The High Court directed the respondent to process the refund application filed on February 22, 2018, and pass appropriate orders in accordance with the law. The respondent must also provide the petitioner with an opportunity of being heard. This entire process is to be completed within a period of four weeks from the date of the order. The writ petition was disposed of with these directions.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition has been filed seeking for a direction to the Respondent to process the refund application filed vide ARN AA331017993212E dated 22.02.2018 and sanction the refund along with interest.
2. Ms. Revathi Manivannan, learned Senior Standing Counsel takes notice on behalf of the Respondent.
3. By consent, this Writ Petition is taken up for final disposal at the stage of admission itself.
4. The petitioner concern is engaged in the business of civil contracting works and registered under GST vide GSTIN 33AAHCR7067C1ZG. During the course of the business, the Petitioner has supplied goods to M/s Vishay Precision Transducers India Pvt Ltd. which is a Special Economic Zone (SEZ) unit in the month of October, 2017 for the taxable value of Rs. 27,50,408/- and paid Rs. 4,95,073/-towards IGST.
5. Learned counsel for the petitioner would submit that as per Section 16 of IGST Act, 2017 the supplies made to SEZ unit are treated as Zero Rate Supplies. As per Section 54 of CGST Act, 2017 read with Section 20 of IGST Act, 2017, any taxpayer making a zero rated supply, can claim refund the of the tax paid by them on the Zero Rated Supplies. Therefore, having paid the IGST tax, the Petitioner has filed a refund application dated 22.02.2018 in form RFD-01 vide ARN No. AA331017993212E claiming for refund of Rs. 4,95,073/- since they made zero rated supplies. He pointed out that as per Section 54 of CGST Act, 2017 refund claim should be made within a period of 2 years from the relevant date and the petitioner has made application for refund within the stipulated time, i.e. on 22.02.2018. However, as there was no response from the respondent for more than a year, the Petitioner, vide letter dated 29.03.2019, requested the respondent for processing their refund application and enclosed all the relevant documents, viz., copy of invoice issued to SEZ unit, GSTR-3B and GSTR-1 filed for October, 2017 and declarations. Even after this, the petitioner has not received any communication from the respondent and thereafter, the Petitioner also did not follow up with the department as regards their refund application. Later, on 17.04.2023, the petitioner once again requested the respondent for processing their refund application. Subsequently, on 26.05.2023, the petitioner received a letter from Superintendent (Technical) Pallavaram Division, stating that they have already sent a Deficiency Memo in Form GST RFD 03 dated 12.04.2019, calling upon the petitioner to rectify certain deficiencies mentioned therein.
6. Learned counsel for the petitioner would submit that no such Deficiency Memo has been received by the petitioner and the petitioner came to know the same only when the Superintendent (Technical) Pallavaram Division enclosed the same with his letter dated 26.05.2023. He would further submit that a representative of the petitioner concern approached the respondent on 09.06.2023 and requested to process the refund application on rectification of the deficiencies mentioned in the Deficiency Memo, however, the petitioner was informed by the respondent that time limit for processing the refund application has expired and hence, it cannot be processed. Hence, the learned counsel seeks a direction to the respondent to process the refund application made by the petitioner.
7. Ms. Revathi Manivannan, learned Senior Standing Counsel appearing for the respondent would submit that since the petitioner has not rectified the deficiencies pointed out in the Deficiency Memo dated 12.04.2019 in time by the petitioner, their application for refund of the tax, has not been processed.
8. It is to be noted that initially, the petitioner has made application well within time, i.e. on 22.02.2018, claiming refund of the tax under Section 54 of CGST Act, 2017 followed a reminder letter dated 29.03.2019, but the respondent has not processed the same, but after a lapse of more than one year, they issued a Deficiency Memo on 12.04.2019 calling upon the petitioner to rectify certain deficiencies mentioned therein. According to the petitioner, they had not received the said Deficiency Memo and they came to know only when they received a letter dated 26.5.2023 from the respondent. Therefore, since the petitioner has made the application claiming refund of the tax within the time, which was not processed by the respondent more than a year, this Court is of the view that it would be appropriate to direct the respondent to process the application without insisting limitation aspect and pass orders therein.
9. Accordingly, the respondent is directed to process the refund application dated 22.02.2018 filed by the petitioner and pass appropriate orders in accordance with law, after giving an opportunity of hearing to the petitioner, within a period of four (4) weeks from the date of receipt of a copy of this order. No costs.
10. With the above directions, this writ petition is disposed of. No costs.