GST Refund Cannot Be Denied Due to Portal Glitches: Gujarat High Court

Jyoti Agro filed a refund application under Section 54(3) of the CGST Act seeking a refund of accumulated Input Tax Credit relating to zero-rated supplies for the period October 2021 to May 2022. While filing Form GST RFD-01, the petitioner could not upload shipping bills on the GST portal due to file size restrictions. Attempts to submit hard copies were refused by the department.

A show-cause notice was issued, which was duly replied to by the petitioner by electronically uploading the shipping bills. However, the refund was rejected on the ground of improper signing of declarations. After re-credit of the amount, the petitioner was unable to file a fresh refund application, as the GST portal blocked re-filing for the same period, despite repeated grievances raised with the GST helpdesk.
A fresh refund application was filed under the “Any Other” category, which again resulted in a deficiency memo. Aggrieved, the petitioner approached the High Court. During pendency, the petitioner reversed the refund amount of Rs. 25,09,124.

Main Issue: Whether a GST refund claim can be denied solely on account of technical glitches and procedural limitations of the GST portal when substantive conditions for refund are fulfilled.

HC’s Decision: The Gujarat High Court allowed the writ petition, holding that refund benefits cannot be denied merely due to technical errors or system constraints when substantive eligibility is undisputed. Relying on Shree Renuka Sugar Ltd. v. State of Gujarat, the Court directed the authorities to process the refund claim after verification of documents.

The petitioner was permitted to file a fresh refund application, either electronically or manually. The respondents were directed to decide the application on merits within six weeks, without raising any objection on the ground of limitation.

To Read Full Judgment, Download PDF Given Below