2022 (10) TMI 1000 - HC - GST

Online portal filing date treated as filing under Section 54 CGST Act and Rule 89; refund re-credit ordered with interest

HC held that the online filing date on the common portal constitutes the date of filing under Section 54 of the CGST Act and Rule 89, so the refund claim ... Refund under Section 54 - relevant date - two year limitation for refund claims - electronic filing on common portal as date of filing - Circular cannot override statutory prescription - re-credit to electronic credit ledger - interest for delayed re-creditRefund under Section 54 - relevant date - two year limitation for refund claims - electronic filing on common portal as date of filing - Circular cannot override statutory prescription - Date of filing of a refund claim for zero-rated supplies to SEZ is the date of electronic submission on the common portal (ARN generation) and not the later date of physical submission of the printout and documents prescribed by the Circular. - HELD THAT: - Section 54(1) prescribes that a refund application must be made before expiry of two years from the relevant date in the form and manner prescribed. The petitioners had filed the refund application on the common portal on 28.12.2018 and received an ARN; respondents treated the claim as filed only on physical submission on 17.10.2019 relying on Circular dated 15.11.2017 which requires submission of a printout with documents to the jurisdictional officer within the time stipulated. The Court held that the procedural requirement in the Circular cannot operate to the detriment of the assessee and cannot override the statutory scheme; consequently the date of filing on the common portal, acknowledged by ARN, must be treated as the date of filing for computing the two-year limitation under Section 54 read with Rule 89, and the Circular cannot be read as imposing a delimiting condition inconsistent with the statute. The Court relied on the settled principle that an executive circular cannot alter statutory provisions to the detriment of the taxpayer and referenced the Division Bench recognition of electronic filing as mode of compliance. Having found that the refund claim was filed on the portal within time and otherwise satisfied statutory requirements, the rejection on the ground of limitation founded on the date of physical submission was set aside. [Paras 5, 6]The date of filing is the date of electronic submission on the common portal (ARN date); the Circular cannot be applied so as to treat the later physical submission date as the filing date for limitation purposes, and the rejection as time-barred on that basis is set aside.Re-credit to electronic credit ledger - interest for delayed re-credit - Rule 93 - Entitlement to re-credit of the rejected portion of the refund claim in the electronic credit ledger and payment of interest for delay was directed. - HELD THAT: - Having held that the refund claim was filed within time on the portal and was otherwise eligible, the Court directed respondents to re-credit the amount treated as rejected into the petitioner's electronic credit ledger. The Court further directed payment of interest at 9% per annum from the date of the order of rejection (19.11.2019) until realisation. The Court ordered completion of the re-credit exercise within two weeks from receipt of the judgment. The direction is consistent with Rule 93 which provides for re-credit where refund is rejected or deemed rejected and with the statutory remedy under Section 54 once entitlement is established. [Paras 6, 7]Respondents directed to re-credit the disputed amount to the electronic credit ledger and to pay interest at 9% p.a. from 19.11.2019 until realisation, with the exercise to be completed within two weeks.Final Conclusion: The petition is allowed: the court held that electronic filing on the common portal (ARN date) is the operative date for computing the two-year limitation under Section 54, set aside the rejection as time-barred, and directed re-credit of the disputed amount into the petitioner's electronic credit ledger with interest at 9% p.a., to be completed within two weeks. Issues Involved:1. Re-credit of the amount in the electronic credit ledger.2. Validity of the order dated 19.11.2019 rejecting the refund claim.3. Applicability of the two-year limitation period under Section 54 of the CGST Act.4. Compliance with procedural requirements for refund claims.5. Impact of Circular dated 15.11.2017 on refund claims.Issue-wise Detailed Analysis:1. Re-credit of the amount in the electronic credit ledger:The petitioner sought a direction for the respondents to re-credit Rs. 3,37,076/- in their electronic credit ledger with interest from the date of the order dated 19.11.2019 till realization. The court directed the respondents to re-credit the said amount with interest at the rate of 9% p.a. from the date of the rejection order until realization.2. Validity of the order dated 19.11.2019 rejecting the refund claim:The petitioner challenged the order dated 19.11.2019 by the Assistant Commissioner, CGST & Central Excise, which rejected the refund claim on the grounds of being time-barred. The court found that the rejection of the refund claim was incorrect as the petitioner had filed the application on the common portal within the stipulated time.3. Applicability of the two-year limitation period under Section 54 of the CGST Act:The primary issue was whether the two-year period for filing a refund claim under Section 54 of the CGST Act should be counted from the date of filing the application on the common portal or the date of physical submission of the application with documents. The court held that the date of filing the application on the common portal should be considered for determining the limitation period.4. Compliance with procedural requirements for refund claims:The respondents argued that the refund claim was time-barred as the physical submission of the application and documents occurred after the expiry of the due date. However, the court noted that the petitioner had filed the application on the common portal within the time limit, and the delay in physical submission should not affect the validity of the claim.5. Impact of Circular dated 15.11.2017 on refund claims:The respondents relied on the Circular dated 15.11.2017, which required physical submission of the application and documents within the stipulated time. The court held that a circular cannot override statutory provisions to the detriment of the assessee. The date of filing the application on the common portal should be treated as the date of filing the refund claim.Conclusion:The court concluded that the petitioner's application on the common portal within the stipulated time satisfied the requirements of Section 54 of the CGST Act. The Circular dated 15.11.2017 could not impose additional conditions that conflict with statutory provisions. Consequently, the petition was allowed, and the respondents were directed to re-credit the amount with interest within two weeks from the date of receipt of the order.