Petitioner cannot seek unit-wise refund after accepting consolidated refund for same transactions under GST

The Orissa HC dismissed a writ petition challenging rejection of supplementary refund applications for unutilized input tax credit on compensatory cess for zero-rated supplies (February-June 2018). The petitioner sought unit-wise refund calculation after accepting consolidated refund based on its own calculations. The HC held that fresh claims on same transactions would constitute impermissible review of Assistant Commissioner's decision. The court found the petitioner had alternative remedy through appeal under Section 107 of GST Act, having declined personal hearing opportunity. Manual filing was not the sole ground for rejection, and the HC declined to read down Rule 89(4) of GST Rules.

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Issues Involved:
1. Validity of Circular No. 125/44/2019-GST dated 18.11.2019.
2. Legality of the orders dated 13.08.2020, 10.09.2020, and 13.11.2020 returning the manually filed supplementary refund applications.
3. Entitlement to file refund applications unit-wise versus consolidated for a single GSTIN.
4. Adherence to Rule 89(4) of the CGST/SGST Rules.
5. Requirement of personal hearing before rejecting refund applications.

Issue-wise Detailed Analysis:

1. Validity of Circular No. 125/44/2019-GST dated 18.11.2019:
The petitioner challenged Circular No. 125/44/2019-GST as being ultra vires the parent Act, arguing that it restricted the ability to file supplementary refund claims manually. The court held that the Circular is valid and not arbitrary, as it aligns with the statutory provisions. The court emphasized that the statute does not envisage filing supplementary refund applications after an original refund claim has been processed.

2. Legality of the Orders Returning Manually Filed Supplementary Refund Applications:
The Assistant Commissioner returned the supplementary refund applications on several grounds, including the lack of provision for filing supplementary claims after an original claim has been processed and the requirement for electronic filing post-26.09.2019. The court upheld these orders, stating that the petitioner had already been granted refund based on consolidated figures for all units under a single GSTIN, and there is no statutory provision supporting supplementary claims unit-wise.

3. Entitlement to File Refund Applications Unit-wise versus Consolidated for a Single GSTIN:
The petitioner sought refunds based on unit-wise calculations, arguing that the consolidated refund was less due to the higher input tax credit ratio in one unit. The court held that since the petitioner chose to register all units under a single GSTIN and filed consolidated returns, it cannot later claim refunds unit-wise. The statutory provisions and rules support a single refund application per GSTIN, not unit-wise.

4. Adherence to Rule 89(4) of the CGST/SGST Rules:
The petitioner argued that Rule 89(4) should be read down as it restricts the right to claim refunds. The court found Rule 89(4) to be intra vires, stating that it is framed in conformity with the powers conferred under Section 164 of the CGST/SGST Act. The court emphasized that the rule provides a formula for refund which must be followed, and the petitioner cannot seek a different method post-facto.

5. Requirement of Personal Hearing Before Rejecting Refund Applications:
The petitioner contended that the Assistant Commissioner should have provided a personal hearing before rejecting the supplementary refund applications. The court noted that the petitioner had the opportunity to challenge the decision through an alternative remedy under Section 107 of the GST Act, which includes provisions for personal hearings. The court found no procedural impropriety in the Assistant Commissioner's actions.

Conclusion:
The court dismissed the writ petitions, holding that:
- Rule 89(4) is intra vires and does not require reading down.
- The petitioner cannot claim supplementary refunds unit-wise after having filed and received refunds based on consolidated figures.
- The reasons provided by the Assistant Commissioner for returning the supplementary refund applications are valid.
- The petitioner has an alternative remedy through appeal under Section 107 of the GST Act.
- The court declined to issue a writ of mandamus to allow the petitioner to file refund applications electronically for previous periods, as the original claims were already processed and accepted.

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