GST refund deficiency memo quashed where authorities agreed to reconsider the refund claim afresh in accordance with law.

A deficiency memo in Form GST RFD-03 issued against a refund claim under Section 54(1) of the CGST Act was quashed because the respondent authorities themselves indicated that the refund application should be considered afresh in accordance with law. The memo issued under Rule 90(3) of the CGST Rules could not be sustained in those circumstances, and the refund application was revived for fresh consideration by the authorities. The note reinforces that a deficiency memo rejecting a refund application cannot stand where there is no live adjudicatory contest and the claim is to be reprocessed under the applicable refund procedure.

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Issues: Whether the deficiency memo issued in Form GST RFD-03 rejecting the refund application could be sustained, and whether the refund application was liable to be revived for fresh consideration.

Analysis: The refund application had been filed under Section 54(1) of the Central Goods and Services Tax Act, 2017. The impugned deficiency memo was issued under Rule 90(3) of the Central Goods and Services Tax Rules, 2017. The respondent authorities sought quashing of the deficiency memo and indicated that the refund application should be considered afresh in accordance with law. In view of that stand, the deficiency memo could not be maintained.

Conclusion: The deficiency memo was quashed and set aside, and the refund application stood revived for fresh consideration by the respondent authorities.

Ratio Decidendi: A deficiency memo rejecting a refund application cannot be sustained where it is not supported by a live adjudicatory contest and the application is directed to be considered afresh in accordance with law.

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