Petitioner wins refund claim for unutilized input tax credit despite missing Section 54(1) deadline due to GST portal technical issues.

Delhi HC allowed petitioner's refund claim for unutilized input tax credit on zero-rated supplies from July 2017 to March 2018. Revenue authorities rejected the application citing filing beyond the two-year limitation period under Section 54(1) of CGST Act, 2017. Court held that petitioner had attempted to file within the prescribed period but was prevented due to technical glitches on the GST portal. The court found that legitimate refund rights cannot be foreclosed due to technical issues and directed proper officer to examine and process the refund claim.

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Issues Involved:
1. Denial of refund of unutilised input tax credit (ITC).
2. Application of the two-year limitation period under Section 54(1) of the CGST Act.
3. Technical glitches in the GST portal affecting the filing of refund applications.
4. Manual filing of refund applications under Rule 97A of the CGST Rules.
5. Bona fide attempts and guidance by jurisdictional GST officers.

Summary:

1. Denial of Refund of Unutilised ITC:
The petitioner was aggrieved by the denial of refund of unutilised ITC accumulated in respect of GST paid on inputs for zero-rated supplies (goods exported without payment of IGST) during July 2017 to March 2018. The Proper Officer rejected the refund application on 11.03.2020, citing it was filed beyond the two-year period specified under Section 54(1) of the CGST Act. This decision was upheld by the Appellate Authority on 06.08.2021.

2. Application of the Two-Year Limitation Period:
The petitioner's application for refund was rejected for being filed beyond two years from the relevant date of export. The Proper Officer determined the relevant dates based on the export dates of the consignments, concluding that the refund claim should have been filed by September 2019 for exports made between July 2017 and March 2018.

3. Technical Glitches in the GST Portal:
The petitioner encountered technical errors while attempting to file refund applications on 14.05.2018 and 08.08.2018. Despite filing a complaint and receiving a ticket, the petitioner was unable to complete the online filing process. The petitioner argued that the authorities ignored these technical glitches, which were beyond his control.

4. Manual Filing of Refund Applications under Rule 97A:
Rule 97A of the CGST Rules, introduced on 15.11.2017, allowed for manual filing of applications. The petitioner claimed he was advised by jurisdictional GST officers to wait until filing the annual GST Returns in Form 9 and obtaining Bank Realisation certificates before filing the refund application, which he did on 05.02.2020.

5. Bona Fide Attempts and Guidance by GST Officers:
The Court acknowledged the transition difficulties during the GST regime rollout and accepted that the petitioner made bona fide attempts to file the refund application. The Court noted that the petitioner's legitimate right to seek a refund should not be foreclosed due to technical glitches and the guidance he received from GST officers.

Conclusion:
The Court directed the proper officer to examine and process the petitioner's refund claim, recognizing the bona fide efforts made by the petitioner and the technical issues faced. The petition was allowed, emphasizing that the petitioner's claim could not be denied on the ground of delay under the peculiar facts of the case.

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