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ANDHRA PRADESH HIGH COURT AT AMARAVATI
C. Praveen Kumar, A.V. Ravindra Babu, JJ.
Rk Infracorp Private Limited – Appellant
Versus
Assistant Commissioner of State Tax, Kadapai Circle & Ors. – Respondents
W.P. Nos. 16262, 16278 and 17958 of 2022
Decided On : 09-09-2022
GST - Refund of Excess Credit - Section 54(1) of CGST Act - Endorsement Rejecting Refund - Legality - Order Sanctioning Refund - Mistake - Remand - Interest on Refund - Section 54(3)(4) of SGST Act - Inapplicability.
Fact of the Case:
The Petitioner, engaged in execution of works contract, filed applications for refund of excess credit lying in Electronic Cash Ledger. The first Respondent issued a Refund Sanction Order for all the applications, but later issued an endorsement rejecting the request for refund, stating that the Petitioner did not submit relevant documents and did not avail the opportunity of personal hearing. The Petitioner challenged the endorsement.
Finding of the Court:
The Court found that the impugned endorsement was passed without any statutory basis and overturned the earlier order sanctioning the refund. It also noted that the Order sanctioning the refund contained a mistake, as it rejected the refund claim in the first page but sanctioned the amount in the last page.
Issues: 1. Whether the impugned endorsement rejecting the refund request was legally valid. 2. Whether the Order sanctioning the refund was valid, considering the mistake in the Order. 3. Whether the Petitioner was entitled to interest on the refund amount.
Ratio Decidendi: 1. The Court held that the impugned endorsement was liable to be set aside as it was passed without any statutory basis and overturned the earlier order sanctioning the refund. 2. The Court found that the Order sanctioning the refund contained a mistake, but noted that the website/portal of the Department showed sanction of refund. It also noted that the Petitioner was not given a notice prior to passing the Order rejecting the request. 3. The Court held that the Petitioner was entitled to interest on the refund amount, if found eligible, as prescribed under law.
Final Decision: The Court allowed the Writ Petitions, set aside the impugned endorsement, and remanded the matters back to the Assistant Commissioner [State Tax] to deal with the applications afresh, after giving an opportunity of hearing to the Petitioner. It directed that the applications be treated as made in the year 2020 and that the refund, if found eligible, be paid along with interest as prescribed under law.
JUDGMENT
C. Praveen Kumar, J. - Since the issue involved in these Writ Petitions being one and the same, they are heard together and disposed of by this Common Order. W.P. No. 17958 of 2022 is taken as a lead petition in deciding the issues involved.
2. The present Writ Petition is filed assailing the Endorsement, dated 28.05.2022, issued by the Assistant Commissioner (State Tax), Kadapa-I Circle, Kadapa, rejecting the request of the Petitioner for refund along with interest, as illegal, improper and incorrect.
3. The facts, in issue, are as under:
i. The Petitioner was engaged in execution of works contract having its Registered Office at Kadapa, with registration under Central Goods and Services Tax Act, 2017, ['CGST Act'], and State Goods and Services Tax Act, 2017, ['SGST Act'], with effect from 01.07.2017.
ii. It is said that, the Petitioner availed Input Tax Credit and adjusted the same against an output liability in its monthly returns. It is further stated that, in addition to the amount available as Input Tax Credit, the Petitioner also has credit of TDS by the contractees under Section 51 of CGST Act/SGST Act @ 2%. The amount is said to be lying as excess credit to the Petitioner in the Electronic Cash Ledger and it does not get adjusted against the output liability, in view of the excess amount lying in the Electronic Credit Ledger. It is said that, the amount credited in the form of TDS is eligible to be refunded to the Petitioner under Section 54(1) of the CGST Act. As the excess amount was lying, in the Electronic Cash Ledger, the Petitioner filed three [03] separate applications for refund of excess credit lying in Electronic Cash Ledger.
iii. The refund applications were processed by the first Respondent leading to issuance of GST RFD-08 on 05.02.2020, proposing to reject the application for refund, on the ground that the Petitioner has not filed relevant documents, in terms of Section 54(3)(4) of SGST Act. The Petitioner was given time to file reply till 20.02.2020. But, however, the Petitioner failed to submit his explanation. Inspite of the same, the first Respondent issued a Refund Sanction Order in GST RFD-06, dated 19.03.2020, for all the three [03] applications. These amounts were to be credited to the bank account specified in the application of the Petitioner. The Order also categorically states that, the application is rejected for an amount of Rupees 'Zero'.
iv. Believing that the applications made by the Petitioner were allowed and as the amount was not being credited in-spite of sanction, the Petitioner addressed a letter on 11.06.2020 to the first Respondent requesting him to release the refund at the earliest. As there was no response, the Petitioner once again brought to the notice of the first Respondent, the inaction on their part in not releasing the amount in-spite of the Order. The said reminder was on 20.05.2022.
v. The Petitioner also claims to have brought to the notice of the first Respondent the Circular, dated 17.11.2021, issued by CBIC, New Delhi, stipulating that any amount unutilized in Electronic Cash Ledger is to be refunded immediately under Section 54 of the CGST Act. In response to the request made by the Petitioner on 20.05.2022, the first Respondent issued the impugned endorsement observing inter alia that there was no response from the Petitioner for the notice issued in RFD-08; opportunity of personal hearing was not availed by the Petitioner and, accordingly, rejected the request for refund. It was also observed by the first Respondent that due to some technical glitches in the website/portal, the refund rejected amount could not be reflected in Statement No. 4 instead of in Statement No. 3. This endorsement, dated 28.05.2022, is sought to be challenged in this Writ Petition.
4. Sri S. Dwarakanath Reddy, learned Senior Counsel, appearing for the Petitioner, mainly submits that, the impugned endorsement could not have been passed by the authority as it has no statutory force. He fu
The Appellate Authority has the power to accept additional evidence, including endorsement certificates, in the given circumstances, where the appellant was prevented by sufficient cause from produci....
The court emphasized adherence to procedural due process in rejecting a refund application and allowing for appeal rights under the Karnataka Goods and Services Tax Act, 2017.
The court ruled that the denial of a tax refund on grounds of limitation was wrong, emphasizing the principle of unjust enrichment, and clarified that the time limit of two years for refund applicati....
A registered taxpayer is entitled to rectify errors in GST returns and claim refunds for excess payments, as supported by relevant circulars and judicial interpretation.
The court emphasized that orders passed by administrative or quasi-judicial authorities are required to stand or fall on their own and subsequent explanations by way of affidavit(s) cannot be permitt....
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