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Sethi Sons (India) Vs. Assistant Commissioner and Ors. (Neutral Citation: 2023:DHC:9318-DB) - (High Court of Delhi) (22 Dec 2023)

Legitimate right to seek refund cannot be foreclosed on account of technical glitches


Goods and Services Tax

The Petitioner has filed the present petition, aggrieved by the denial of refund of unutilised input tax credit (ITC) accumulated in respect of the Goods and Services Tax paid on inputs in respect of the zero-rated supplies-goods exported without payment of Integrated Goods and Services tax (IGST)-during the period from July 2017 to March 2018.

The Petitioner impugns an Order-in-Original whereby the Proper Officer rejected the Petitioner's application for refund on the ground that it was filed beyond the period of two years as specified under Section 54(1) of the Central Goods and Services Tax Act, 2017 ('the CGST Act').The Petitioner appealed the said decision before the Appellate Authority, but was unsuccessful. The Petitioner's appeal was rejected by an Order-in-Appeal, which is also impugned in the present petition.

A plain reading of Sub-section (1) of Section 54 of the CGST Act indicates that, any person who is claiming a refund of tax or interest, if any, paid on the amount is entitled to make an application before the expiry of two years from the relevant date and in such form and manner as may be prescribed.

In terms of Rule 89(1) of Central Goods & Services Rules, 2017 ('the CGST Rules'), any person claiming refund of tax was required to make an application electronically in FORM GST RFD-01 along with the requisite documents. It is also material to note that, there were technical glitches in the electronic system of the GST authorities and taxpayers across the board were facing difficulties in electronic filing of returns.

In the present case, there is no dispute that, the Petitioner had attempted to upload its application for refund but could not do so on account of technical glitches. Present Court find it difficult to accept that, the Petitioner's legitimate right to seek refund could be foreclosed on account of such technical glitches.In terms of Rule 97A of the CGST Rules (introduced with effect from 15.11.2017), the petitioner could also file the application manually. However, it must be recognized that the period in question was a period of transition. It was fraught with various kinds of difficulties being faced by the taxpayers migrating to the new regime.

Undisputedly, the Petitioner had acted in a bona fide manner.There is no dispute that, the Petitioner had attempted to file an application for refund on the GST portal twice but its application could not be uploaded on account of technical glitches. It is not disputed that the petitioner had also made a complaint and a ticket for the same was also raised.

In the peculiar facts of the case, present Court is unable to accept that, the Petitioner's claim for refund is required to be denied on the ground of delay. Present Court direct the proper officer to examine the petitioner's claim for refund and process the same, if it is found that the Petitioner is entitled to the same. Petition allowed.


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