Refund of sum deposited due to ITC discrepancy

[AMIT BATHAM]

Due to an ITC mismatch, one of my clients had to deposit tax via DRC-03 in August 2022 for the tax year 2018–2019. Following this, some suppliers who had not yet filed their GSTR-1 filed, and some suppliers issued certificates in accordance with Circular 183/15/2022 which was issued in Dec. 2022. During the case hearing, the assessing officer accepted the reply and and after giving credit of certificate and GSTR-2A passed a speaking order, stating that the refund requested in the notice's reply would be considered under the GST relevant section in a separate application. In December 2023, the order was passed. In the refund application, the assessing officer sent a notice stating that the applicant had voluntarily deposited tax and tax under section 73(5) via DRC-03, so it was not covered by excess tax payment and went against the legal system as defined by section 54 of the GST. Please advise me

AI Summary

Excess tax payment refund: challenge where DRC-03 deposit after ITC mismatch is treated as voluntary payment.
Taxpayer paid tax via DRC-03 to correct an ITC mismatch; the assessing officer accepted facts in assessment but in the refund proceeding treated the DRC-03 deposit as a voluntary payment not constituting excess tax eligible for refund under the statutory refund mechanism. The practical remedies are to check whether a deficiency memo or show-cause notice was issued, refile RFD-01 under the assessment-related category with the assessment order, or respond to a show-cause and, if rejected, pursue appeal or writ remedies; similar judicial decisions have ordered refunds.