Refund of unutilised input tax credit dispute over Rule 108 procedural filing requirements leads to remand for de novo hearing.

Challenge concerned rejection of appeals for delay under Rule 108 concerning refund of unutilised input tax credit and discrepancy between invoice and shipping bill values. The reasoning noted Rule 108(3) required submission of the appealed order within seven days and issuance of acknowledgment, justifying initial rejection for delay. Noting a clarificatory amendment effective 26 December 2022 that treats uploaded orders viewable on the portal as obviating the need for certified physical copies, the amendment was applied retrospectively to negate the delay-based rejection. The appellate order rejecting the appeal was quashed and the matter remitted for de novo adjudication with an opportunity of hearing.

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Issues Involved:
1. Rejection of refund claim due to discrepancies between invoice and shipping bill.
2. Delay in submission of certified copies of Order-in-Original for appeals.
3. Applicability and interpretation of Rule 108(3) of the CGST Rules.
4. Retrospective effect of the amendment in Rule 108(3) based on GST Council recommendations.

Summary:

Issue 1: Rejection of Refund Claim
The petitioner, engaged in the manufacture and export of pharmaceuticals, sought a refund of unutilized input tax credit u/s 16 of the IGST Act. The adjudicating authority issued a show-cause notice due to discrepancies between the invoice and shipping bill values and subsequently sanctioned only a partial refund, rejecting the rest.

Issue 2: Delay in Submission of Certified Copies
The petitioner filed appeals online u/s 107 of the CGST Act but submitted the certified copies of the Order-in-Original late. The appellate authority calculated delays ranging from 71 to 106 days and rejected the appeals based on this delay, as stipulated by Rule 108(3) of the Rules.

Issue 3: Applicability and Interpretation of Rule 108(3)
The petitioner argued that Rule 108(3) should not apply since the appeals were filed online based on orders uploaded by the adjudicating authority. The appellate authority, however, adhered strictly to Rule 108(3) and Circular No.157 dated 20th July 2021, which mandated the submission of certified copies within seven days.

Issue 4: Retrospective Effect of Amendment in Rule 108(3)
The court considered the Minutes of the 48th GST Council Meeting, which recommended amendments to Rule 108 to clarify that if an order is uploaded on the common portal, the submission of a certified copy becomes insignificant. This amendment, being clarificatory, was deemed to have retrospective effect.

Judgment:
The court quashed the appellate authority's order rejecting the appeals on the ground of delay. It held that the amendment to Rule 108(3) has retrospective effect and thus, the impugned order does not survive. The matter was remanded back to the appellate authority for a fresh de novo order on merits, with instructions to complete the exercise within 12 weeks from the receipt of the court's order. The court did not address the merits of the refund claim, leaving it to the appellate authority to decide after giving the petitioner an opportunity for a hearing. The petitions were disposed of with no order as to costs.

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