2026 (1) TMI 767 - HC - GST

Accumulated ITC refund claim amid GST portal upload errors and missing shipping bills - writ allowed directing verification and refund processing

Whether the petitioner was entitled to refund of accumulated ITC despite portal errors and alleged non-compliance with Rule 89(5). The HC found the refund ... Refund of accumulated Input Tax Credit (ITC) - application in Form GST RFD-01 under Section 54(3) of the Central Goods and Services Tax Act, 2017 (the CGST Act) - duly complied with the guidelines of Circular No. 125/44/2019-GST, except that the shipping bills could not be uploaded on the GST portal due to size constraints on the portal - HELD THAT:- Since the refund application had been rejected through Form GST RFD-06 and the refund amount was re-credited through Form GST PMT-03 into the electronic credit ledger, the petitioner again attempted to file a refund application for the period from October, 2021 to May, 2022 for refund of accumulated ITC. However, the GST portal did not allow filing of the application and displayed an error stating that the application for the said period had already been filed. On 18.11.2022, since the credit remained blocked, the petitioner raised a grievance by email to [email protected], requesting a solution for the error displayed on the GST portal while attempting to file a fresh refund application for the period from October, 2021 to May, 2022. In response to the grievance, the petitioner received a reply dated 22.11.2022 from the GST Helpdesk, wherein it was stated that a refund application for the same period cannot be filed again and that a new refund application can be filed only for the period for which a NIL refund application was filed. On 02.01.2023, the petitioner filed a fresh refund application in Form GST RFD-01 under the category “Any Other” for the period from October, 2021 to May, 2022. The petitioner further submitted a letter dated 30.12.2022 along with the refund application dated 02.01.2023, enclosing relevant documents in support of the refund claim. On 19.01.2023, the respondent No.02 issued a deficiency memo in Form GST RFD-03, wherein it was contended that the petitioner had not filed the refund application as per Rule 89(5) of the Central Goods and Service Tax Rules, 2017 (“CGST Rules”) for the period from October, 2021 to May, 2022 and that the refund amount had not been debited from the electronic credit ledger. The present writ petition is allowed. The respondents are directed to act accordingly, in view of the averments made in the affidavit filed by the petitioner, after verification of the documents. Issues: (i) Whether the petitioner is entitled to refund of IGST amounting to Rs. 25,09,124/- claimed for zero-rated supplies for the period October 2021 to May 2022, notwithstanding prior rejection due to technical errors on the GST portal and procedural non-compliance, and whether the respondents should be directed to verify and process the refund application on merits.Analysis: The refund claim was filed under Section 54(3) of the Central Goods and Services Tax Act, 2017 and a supplementary application was filed under the category 'Any Other' after earlier rejection and re-crediting to the electronic credit ledger. The respondents raised procedural objections including non-compliance with Rule 89(5) of the CGST Rules and portal-related filing errors. Prior coordinate-bench precedent addresses entitlement to refund where substantive conditions are satisfied and denial results from technical or electronic-system lacunae. The petitioner filed an affidavit evidencing reversal of credit through Form GST DRC-03 and undertook to furnish documents; the petitioner also undertook to file a fresh application for verification so that interest may be calculated from the date of such fresh application. The respondents were directed to verify documents and decide the fresh application on merits without raising limitation objections.Conclusion: The petitioner is entitled to have the refund claim of Rs. 25,09,124/- verified and processed on merits. The respondents are directed to accept a fresh application (electronic or manual), verify the supporting documents, and pass an appropriate order within six weeks from receipt of the order; no objection on limitation shall be raised and interest shall be calculated from the date of the fresh application.