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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
C.Praveen Kumar, Tarlada Rajasekhar Rao, JJ.
FedEx Express Transportation and Supply Chain Services India Private Limited – Petitioner
Versus
The Additional Commissioner- Respondent
Writ Petition No. 2478 of 2022 & Writ Petition No. 2498 of 2022
Decided On : 05-08-2022
GST - Refund Claim - Endorsement Certificate - Acceptance of Additional Evidence - Sufficient Cause - Due Diligence - Natural Justice - Interpretation of Rule 112 of CGST Rules - Discretion of Appellate Authority - Rejection of Refund Claim without Considering Endorsement Certificate - Violation of Principles of Natural Justice - Remand to Appellate Authority for Fresh Consideration.
Fact of the Case:
The Petitioner, a company registered under the CGST and APGST Acts, filed refund claims for zero-rated supplies made to SEZ Units. The Petitioner was unable to obtain endorsement certificates from the specified officers of the SEZ Units due to restrictions imposed during the Covid pandemic. The Petitioner filed the refund claims without the endorsement certificates and later submitted the same to the Appellate Authority pending appeal. The Appellate Authority rejected the refund claims on the ground that the endorsement certificates were not submitted within the prescribed time. The Petitioner challenged the Appellate Authority's order, contending that it violated the principles of natural justice and that the Appellate Authority should have accepted the endorsement certificates filed pending appeal.
Finding of the Court:
The Court held that the Appellate Authority had the power to accept additional evidence, including the endorsement certificates, in the given circumstances. The Court found that the Petitioner had exercised due diligence in trying to obtain the endorsement certificates and that it was prevented from doing so due to the Covid pandemic. The Court also held that the Appellate Authority had not given the Petitioner an opportunity to explain the reasons for the rejection of its claim.
Issues: 1. Whether the Appellate Authority could accept the endorsement certificates filed pending appeal. 2. Whether the Petitioner had exercised due diligence in trying to obtain the endorsement certificates. 3. Whether the Appellate Authority had given the Petitioner an opportunity to explain the reasons for the rejection of its claim.
Ratio Decidendi: 1. Rule 112 of the CGST Rules allows the Appellate Authority to accept additional evidence in certain circumstances, including where the appellant was prevented by sufficient cause from producing the evidence before the assessing officer. 2. The Petitioner had exercised due diligence in trying to obtain the endorsement certificates, as evidenced by the correspondence with the SEZ Units. The Petitioner was prevented from obtaining the certificates due to the Covid pandemic. 3. The Appellate Authority had not given the Petitioner an opportunity to explain the reasons for the rejection of its claim, which violated the principles of natural justice.
Final Decision: The Court allowed the Writ Petitions, set aside the Appellate Authority's order, and remanded the matters back to the Appellate Authority to deal with the same afresh after accepting the application filed by the Petitioner for additional evidence.
ORDER :
C. Praveen Kumar
1. Since the issue involved in both the Writ Petitions being one and the same, they are heard together and disposed of by this Common Order. W.P. No. 2498 of 2018 is taken as a lead petition in deciding the issue involved.
2. The present Writ Petitions came to be filed to declare the Order in Appeal No. VIZ-GST-000-APP-021-21-22, dated 30.07.2021, passed by Respondent No. 1 herein rejecting the appeal filed by the Petitioner without considering the endorsement certificates filed by the Petitioner in the Appeal as illegal, improper and incorrect and violative of Article 14 and 19(1)(g) of the Constitution of India and consequently to direct Respondent No. 2 to grant refund to the Petitioner.
3. The facts are as under:
ii. The Petitioner is primarily engaged in business of providing Express Courier Services to Units situated in Special Economic Zone [‘SEZ’]. The period in dispute is between April, 2018 to July, 2018 and August, 2018 to March, 2019. The Petitioner made supplies to SEZ Unit, which are to be treated as zero rated supplies and, as such, the Petitioner is entitled for refund of input taxes paid, while making zero rated supply, in view of Section 16 of Integrated Goods and Service Tax, 2017, [‘I.G.S.T. Act’].
iii. An application for refund came to be made under Section 54 of C.G.S.T Act read with Rule 89 of Central Goods and Service Tax Rules, 2017 [‘C.G.S.T. Rules’]. The said application has to be made within a period of two years from the relevant time, but, due to Covid Pandemic, the time limit was extended through Notifications from time-to-time.
iv. It is the case of the Petitioner that it has filed the refund claim in Form GST RFD-01 on 28.08.2020 [Form GST RFD-01 on 30.08.2020 in W.P. No. 2478 of 2022] in terms of Section 54 of the C.G.S.T. Act read with Notification No. 35/2020 (Central Tax), dated 03.04.2020, as amended by Notification No.55/2020 (Central Tax), dated 27.06.2020, for supplies made to its recipients, which are in SEZ. An acknowledgment evidencing filing of refund claim was received by the Petitioner.
v. It is said that, in order to file a refund claim, the Petitioner approached/corresponded with its recipient viz., the SEZ Units, to obtain endorsement certificates from the specified officer of their respective zone in relation to receipt of services by these SEZ Units for their authorised operation. The details of correspondence are referred to in the affidavit which is not in dispute. It is further averred in the affidavit that, the SEZ Units were unable to obtain endorsement certificate from the specified officer of SEZ due to restrictions imposed in the wake of Covid pandemic. Since, the refund claims are to be filed on or before 31.08.2020, the Petitioner filed the refund claim along with necessary supporting documents as outlined in C.G.S.T. Rules, except the endorsement certificate.
vi. While things stood thus, the Petitioner received show cause notice in Form GST RFD-08, dated 15.09.2020, [dated 14.09.2020 in W.P. No. 2478 of 2022] issued by Respondent No. 2, wherein the claim of the Petitioner was denied on the ground that the endorsement certificates were not submitted by the Petitioner, and that the Petitioner was directed to show cause as to why the refund claim should not be rejected for non-furnishing of the certificate within 15 days from the date of receipt of notice. The Petitioner addressed a letter, dated 28.09.2020, requesting 30 days time to furnish a reply to the show cause notice. Thereafter, the Petitioner filed a reply to the show-cause notice on 30.09.2020, explaining as to why the endorsement certificates could not be enclosed along with the refund claim, while other documents evidence zero rated supplies to SEZ Units. It is said that, wit
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