Appeal allowed for refund claim of M/s Texrio Textiles Private Limited under CGST Act

The appeal was allowed, setting aside the order rejecting the refund claim by M/s Texrio Textiles Private Limited. The appellant was deemed eligible for a refund of Rs. 21,85,639, as determined by the jurisdictional Dy Commissioner following proper procedures. The adjudicating authority was directed to process the refund claim in compliance with the CGST Act and rules, ensuring the claim was assessed fairly. The appeal was resolved in favor of the appellant, emphasizing the importance of considering refund claims on their merits.

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Issues Involved:
1. Rejection of refund claim due to non-submission of documents.
2. Technical glitches in the GST portal.
3. Lack of opportunity for the appellant to be heard.
4. Non-receipt of show cause notice and rejection order.
5. Admissibility and calculation of refund claim.

Issue-wise Detailed Analysis:

1. Rejection of Refund Claim Due to Non-submission of Documents:
The appellant, M/s Texrio Textiles Private Limited, filed a refund application under Section 54 of the CGST Act, 2017, for ITC on export of goods and services without payment of tax. The adjudicating authority issued a show cause notice (SCN) stating that the claimant had not submitted details of ITC for which the refund was claimed. Consequently, the refund claim was rejected on the grounds that no response was received to the SCN, and it was assumed that the claimant had nothing to submit, making the refund inadmissible.

2. Technical Glitches in the GST Portal:
The appellant contended that due to technical glitches in the GST portal, the details of the SCN were not available, and they were unaware of the reasons for its issuance. Despite these glitches, the appellant personally approached the department and submitted the required documents via email within the prescribed time. The appellant argued that non-compliance due to technical issues should not be a reason for rejection of the refund application.

3. Lack of Opportunity for the Appellant to be Heard:
The appellant claimed that the refund application was rejected without giving an opportunity to be heard, especially considering the technical issues with the portal. The appellant emphasized that the rejection was unjust as they had complied with the SCN requirements by submitting documents via email.

4. Non-receipt of Show Cause Notice and Rejection Order:
The appellant stated that they did not receive the SCN or the rejection order from the department and were unable to download them from the GST portal. During the personal hearing, the appellant's representative confirmed that they later obtained copies of the SCN and rejection order from the concerned division. The appellant argued that the rejection was improper as they were not given a fair chance to respond due to non-receipt of the SCN.

5. Admissibility and Calculation of Refund Claim:
Upon review, it was found that the proper officer did not follow the correct procedure before rejecting the refund application. The jurisdictional Dy Commissioner verified the refund claim and determined that Rs. 21,85,639/- out of the total Rs. 23,12,195/- was eligible for refund. The calculation was based on the formula prescribed under Rule 89 of the CGST Rules, 2017, considering the lower value between the GST invoice and the shipping bill.

Conclusion:
The appeal was allowed, and the order passed by the adjudicating authority was set aside. The appellant was found eligible for a refund of Rs. 21,85,639/-. The adjudicating authority was directed to process the refund claim in accordance with the CGST Act and rules. The appeal was disposed of in favor of the appellant, ensuring that the refund claim was examined on its merits.

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