HC allows GST Refund claim beyond limitation period owing to delay in filing due to GST Portal Glitches [Read Order]

The Delhi High Court in the matter of M/S SETHI SONS (INDIA) Vs. ASSISTANT COMMISSIONER has allowed GST Refund claim beyond the limitation period owing to a delay in filing due to GST Portal Glitches.

The petitioner has filed the present petition, essentially, aggrieved by the denial of refund of unutilised input tax credit (ITC) accumulated in respect of the Goods and Services Tax paid on inputs in respect of the zero-rated supplies – goods exported without payment of Integrated Goods and Services tax (IGST) – during the period from July 2017 to March 2018.

The petitioner is an individual and carries on the business of, inter alia, exporting goods and services under the name of its sole proprietorship concern, M/s Sethi Sons (India).

The petitioner had exported eight consignments during the period from July 2017 to March 2018. The first consignment was exported on 08.09.2017 under the export invoice dated 02.09.2017 and the Shipping Bill dated 04.09.2017. The last of the eight consignments was exported on 29.01.2018, which was covered by an export invoice dated 24.01.2018, under a Shipping Bill dated 25.01.2018.

The petitioner attempted to file an application for refund of unutilised ITC for the month of August 2017 on 14.05.2018. However, the petitioner could not complete the online filing of this application due to a technical error encountered on the GST portal.

The petitioner once again attempted to file an application for a refund of unutilised ITC for the month of July, 2017 on 08.08.2018. However, the petitioner was unable to complete the process on account of technical errors encountered on the GST Portal.

Aggrieved by being unable to file the applications for refunds online, the petitioner filed a complaint on the GST portal under the GST Redressal Section. The petitioner’s complaint was acknowledged and a ticket bearing no.2018080832227 was issued.

The petitioner claims that he made several efforts to manually submit its application. However, the concerned officer declined to accept the same. This assertion is disputed by the respondents as the respondents do not have any record of the same.

The petitioner made a consolidated application (in FORM GST RFD-01) for the refund of unutilised ITC exports effected during the financial year 2017-18 on 05.02.2020 claiming a refund of Rs.13,43,757.

The petitioner’s application for refund under Section 54 of the CGST Act was rejected on the ground that it was filed beyond the period of two years from the relevant date being the date of export of the consignments. The Proper Officer held that since the first consignment was exported on 08.09.2017, the last date for filing an application for refund of unutilised ITC in respect of the said export was 07.09.2019. The last consignment was exported on 29.01.2018 under an export invoice dated 24.01.2018. Therefore, the Proper Officer held that the last date for filing refund in respect of the said exports was 24.01.2020. The Proper Officer further held that the refund claim for the period of July 2017 to March 2018 was required to be filed on or before September 2019 and therefore, the refund was liable to be rejected in terms of Section 54(1) of the CGST Act.

In the present case, there is no dispute that the petitioner had attempted to upload its application for refund but could not do so on account of technical glitches. We find it difficult to accept that the petitioner’s legitimate right to seek refund could be foreclosed on account of such technical glitches.

In terms of Rule 97A of the CGST Rules (introduced with effect from 15.11.2017), the petitioner could also file the application manually. However, it must be recognized that the period in question was a period of transition. It was fraught with various kinds of difficulties being faced by the taxpayers migrating to the new regime.

It is also acknowledged that there were delays in processing refund due to various taxpayers. In the present case, the petitioner has affirmed that he did not file refund applications manually as he was guided by the jurisdictional GST Officers that the refund claim was required to be filed after the actual GST return in Form GSTR-9 was filed and after obtaining bank realization certificates. The petitioner claims that he filed his return on 30.01.2020 and filed an application for refund immediately thereafter. The respondent has denied that the concerned officer had misguided the petitioner in any manner and there is no record of any advice given by the concerned officer. However, we are inclined to accept the petitioner’s version that he had made oral enquiries for filing an application for refund. Ordinarily, this would be no ground to overlook the delay but this Court cannot be oblivious of the fact that during the initial period of the rollout of the GST regime, both taxpayers and the officials of the GST departments had faced innumerable difficulties which were being addressed. Some of the difficulties still persist and are being addressed. In this environment, it is not difficult to accept that a taxpayer would have sought advice from the jurisdictional officers. Undisputedly, the petitioner had acted in a bona fide manner.

There is no dispute that the petitioner had attempted to file an application for refund on the GST portal twice but its application could not be uploaded on account of technical glitches. It is not disputed that the petitioner had also made a complaint and a ticket for the same was also raised.

In the peculiar facts of the case, we are unable to accept that the petitioner’s claim for a refund is required to be denied on the grounds of delay.

In view of the above, we direct the proper officer to examine the petitioner’s claim for refund and process the same, if it is found that the petitioner is entitled to the same.

The petition is allowed in the aforesaid terms.

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