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GST – Andhra Pradesh High Court: Issue of eligibility of refund claim when inadvertently revenue sanctioned the refund even after raising objections in SCN - Held that reflection of refund in statement 4 on the ground of some technical glitches on the website/portal is without any statutory basis, therefore is set aside; Matter remanded back to decide the case afresh: Petition allowed. [Order Attached dated 09 September 2022]

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17-Sep-2022 10:12:16

Order date – 09 September 2022

Facts –

The Petitioner, RK INFRACORP PRIVATE LIMITED, was engaged in execution of works contract and availed Input Tax Credit and adjusted the same against an output liability in its monthly returns.
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
The Petitioner filed three separate applications for refund of excess credit lying in Electronic Cash Ledger.
The first Respondent issued 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, a Refund Sanction Order in GST RFD-06, dated 19.03.2020, for all the three 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”.
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, followed by a reminder letter on 20.05.2022.
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 alleged by 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.
Therefore the endorsement, dated 28.05.2022, is sought to be challenged in this Writ Petition.

Issue –

Whether the request of refund of the Petitioner was accepted or not?

Order –

The Court observed that on the ground that due to some technical glitches on the website/portal, the request for refund amount of Rs.85,14,656/- is reflected in Statement No. 4. has no statutory force, as it does not reflect the provision of law under which the said endorsement came to be issued. Since, the impugned endorsement came to be made without any statutory basis it is liable to be set-aside, accordingly, the same was set-aside.
Therefore, the Writ Petitions were allowed and the matters are remanded back to the Assistant Commissioner to deal with the same afresh after accepting the applications filed by the Petitioner in the month of January 2020, for refund of excess balance in the Electronic Cash Ledger, in accordance with law, by giving an opportunity of hearing to the Petitioner.
Three applications made by the Petitioner on 24.01.2020 as applications for refund made in the year 2020 itself and if it is found that the Petitioner is eligible for refund of excess credit in the Electronic Cash Ledger, the said amount shall be paid to the accounts of the Petitioner along with interest as prescribed under law.