In a recent decision, the Gujarat High Court addressed the issue of refund denial due to technical problems on the GST portal. The case involved M/s Jyoti Agro, which had filed a refund application under Section 54(3) of the CGST Act for accumulated Input Tax Credit (ITC) from zero-rated supplies between October 2021 and May 2022. The petitioner faced difficulties as the GST portal's size restrictions prevented the uploading of necessary shipping bills, and physical submissions were not accepted by the tax department.
The refund application was initially rejected on technical grounds, and the amount was returned to the electronic credit ledger. Furthermore, the GST portal did not allow the filing of a new refund application for the same period. The central issue was whether a refund could be denied due to the GST portal's technical limitations, despite the petitioner meeting all substantive conditions.
Read More: Delhi High Court: Mere uploading of a notice or order on the GST portal does not constitute valid or effective service on the taxpayer; Adjudication order quashed and remanded for fresh consideration [Order attached]
The High Court ruled that a taxpayer's right to a refund should not be compromised due to technical or systemic issues on the GST portal. It emphasized that procedural errors or electronic barriers should not override statutory entitlements when conditions under Section 54 are satisfied. The court deemed the rejection of the refund on purely technical grounds as unsustainable and allowed the petitioner to file a fresh refund application, either electronically or manually. The authorities were instructed to process the refund based on its merits, without objecting to limitations, within a specified timeframe.
Parties: M/s Jyoti Agro v. Deputy Commissioner of State Tax & Anr.
Order Date: 08 January 2026
Facts –
- The petitioner filed a refund application under Section 54(3) of the CGST Act for accumulated ITC arising from zero-rated supplies for the period October 2021 to May 2022.
- Shipping bills could not be uploaded due to GST portal size restrictions, and physical submission was refused by the department.
- The refund application was rejected on technical grounds and the amount was re-credited to the electronic credit ledger.
- The GST portal thereafter did not permit filing of a fresh refund application for the same period.
Issue –
- Whether refund of accumulated ITC can be denied on account of technical limitations of the GST portal, despite satisfaction of substantive conditions?
Order –
- The High Court held that substantive refund rights cannot be defeated due to technical or systemic glitches on the GST portal.
- It reiterated that procedural lapses or electronic limitations cannot override statutory entitlement when conditions under Section 54 are fulfilled.
- The rejection of refund solely on technical grounds was held to be unsustainable.
- The petitioner was permitted to file a fresh refund application, either electronically or manually.
- The authorities were directed to process the refund on merits, without raising limitation objections, within a stipulated period.
