Manoj Handlooms Pvt. Ltd. vs. Union Of India And Others
(Allahabad High Court, Uttar Pradesh)

1. Heard Sri Aditya Gupta, learned counsel for the petitioner; Sri Dhananjay Awasthi, learned counsel appearing for the CGST and Sri V.K. Pandey, learned counsel appearing for the UPGST authority.

2. Present petition has been filed seeking quashing of the orders dated 26.02.2021, 01.04.2021 and 15.05.2021 and the notice issued on Form GST-RFD-08 dated 17.07.2021.

3. Undisputedly, vide order dated 08.01.2021 passed by the Additional Commissioner Grade-2 (Appeal)-II., Commercial Tax, Jhansi, that appeal authority allowed the assessee’s Appeal No. AD090720003045L/13-07-2020 and set aside the order no.86 dated 11.07.2019 passed by the Deputy Commissioner (SIB), Commercial Tax, Jhansi, and directed for refund of the entire amount on deposit made by the petitioner/assessee, under the order dated 11.07.2019.

4. Again, undisputedly, the aforesaid order of the appeal authority dated 08.01.2021 has attained finality.

5. In the above fact background, the petitioner appears to have made his first application for refund of ₹ 15 lacs deposited in terms of the order dated 11.07.2019. This application was filed on 05.02.2021. Acknowledgement on Form GST-RFD-02 was issued to the petitioner through the GST System Portal.

6. Relying on Rule 90(2) of the Central Goods and Services Tax Rules, 2017, it has been submitted that the acknowledgement on Form GST-RFD-02 may arise only in the event of the refund application being found to be proper and complete upon due scrutiny. Thus, according to the learned counsel for the petitioner, once the acknowledgement had been issued on Form GST-RFD-02, it was not open to the respondent authority to pass the impugned order dated 26.02.2021 on Form GST-RFD-06, rejecting the claim with the following remark:

“I hereby reject the claim for non submission of any documentary evidence regarding payment of tax & penalty.”

7. The petitioner has been forced to file repeated applications, which have been similarly rejected. It is the submission of learned counsel for the petitioner that the GST authorities are acting contrary to law inasmuch as the petitioner is entitled to refund of ₹ 15 lacs together with statutory interest. That right is indefeasible in view of the fact that the order of the appeal authority dated 08.01.2021 has long attained finality and the refund application filed by the petitioner was complete in all respects as is evident from the Form GST-RFD-02. The recital in the rejection order that the application was incomplete is patently perverse inasmuch as the existence of the appeal order or the fact that it had attained finality, are undisputed.

8. Having heard learned counsel for the parties and having perused the record, the facts being undisputed, at this stage itself, no useful purpose may be served in keeping the present petition pending or calling for a counter affidavit. Once the basic facts are admitted to the revenue authorities being entitlement of refund arising from the appeal order dated 08.01.2021 and it is also not disputed that the petitioner had filed application for refund through online mode, it was for the revenue authorities to scrutinize the same and inform the assessee in real time, of any defect in that application. Here, we may observe, upon scrutiny, the acknowledgment on Form GST-RFD-02 was issued acknowledging the claim filed by the petitioner. The revenue authorities also cannot deny existence of the appeal order dated 08.01.2021. Their further conduct to decline the refund on the reasoning or excuse of the application being incomplete, does not inspire confidence.

9. In a case such as this where the refund claim has arisen solely on the strength of the appeal order, unless the assessing authority may plead ignorance of the same, we also cannot remain unmindful of the fact, while rejecting such claims, the authorities are forcing the assessee to litigate and also defeating the claim of interest that is otherwise due on account of delay in processing the refund application.

10. Accordingly, the present writ petition is allowed. The orders dated 26.02.2021, 01.04.2021 and 15.05.2021 are set aside. The respondent no.3 shall pass a fresh order with respect to the acknowledgement on Form GST-RFD-02 dated 05.02.2021. Needless to add, in the event, any amount of refund is found due it may be paid to the petitioner together with statutory interest for the period for which the refund application has remained pending since 05.02.2021.

11. Let a copy of this order be communicated to the Commissioner, CGST and UPGST by the Registrar General of this Court for issuance of appropriate directions to the concerned authorities within their respective jurisdiction.

12. The above exercise may be completed within a period of three days from the date of communication of this order.