TaxTMI 
TaxTMI 
2023 (11) TMI 774
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The challenge in these Writ Petitions is to the Order-in-Appeal passed by the first respondent, Joint Commissioner of GST (Appeals-1) dated i) 26.07.2022; ii) 29.06.2022 and iii) 28.06.2022 and to quash the same and consequently, to direct the second respondent, Assistant Commissioner of GST and Central Excise to sanction the refund amount along with interest immediately. 3. Since the issue involved in all these three Writ Petitions is identical, all these Writ Petitions were heard together and disposed of vide this Common Order. 4. The facts of the case in short are as follows:- i) The petitioner is engaged in manufacture/import of Computers (Desktops/Laptops etc.) and supplying the said goods and related services to units in Special Economic Zones (in short, SEZ Unit). As per Section 16 of the Integrated Goods and Services Tax Act, 2017 (IGST Act, in short) exports and supply of goods or services or both to SEZ units/developers are considered as zero-rated supplies (i.e. no tax is payable on such supplies). The petitioner filed applications under Section 16 of IGST Act read with Section 54 of Central Goods and Services Tax Act, 2017 (CGST Act) read with Rule 89 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....refund claim, and hence, the claim for refund cannot be considered. ii) The claimant has made mistakes in the Statement-4 in order to veil the fact of inordinate delay in obtaining endorsements from SEZ Officer. The POD documents submitted in respect of II invoices after the personal hearing is beyond the period of two years. Hence, the refund claim cannot be allowed. iii) Proof of receipt of consideration in respect of supply of services was not submitted along with the application and was submitted only with the reply, which was beyond the period of two years. As per Rule 30 (4) of the SEZ Rules, 2006, the endorsement should have been made withing 45 days and refund cannot be allowed, if the date of endorsement is beyond 45 days. C). In respect of the application for refund made for the month of February, 2020 dated 26.02.2022 to the tune of Rs. 1,89,22,862/- the second respondent vide order dated 26.04.2022 rejected the claim partially to the tune of Rs. 1,63,25,141/- on the following grounds:- ''i) The claimant has made mistakes in the Statement-4 in order to veil the fact of inordinate delay in obtaining endorsements from SEZ Officer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f applicable IGST, the petitioner made applications for refund under Section 16 of the IGST Act read with Section 54 of the CGST Act read with Rule 89 of CGST Rules, 2017 and hence, it is not open to the respondent- Department to contend that as per Rule 30 (4) of SEZ Rules 2006, the endorsements ought to have been obtained within 45 days from the date of invoice, and hence, the impugned orders rejecting the petitioner's claim by applying SEZ rules is not sustainable. 7.2 The learned counsel further submitted that it is their SEZ customers, who are required to obtain endorsement from the Authorized Officer (AO) and the petitioner cannot insist the AO to issue the endorsement in time. Further, as per SEZ Act or Rules, the AO is not required to make endorsement in any particular manner, since the invoices submitted by the petitioner were endorsed by AO, there is no doubt that the goods were supplied to SEZ units under Section 16 of IGST Act, and the petitioner is entitled for zero-rated tax benefit and delay in obtaining the endorsements, or mistake, if any, in such endorsements, are all technical irregularity and so long as the signature is not doubted, the petitioner cannot ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... excluded while calculating 60 days for the Officer to pass orders in such application under Section 54 (7) of CGST Rules. 8.2 Thus, by referring to the aforesaid provision, the learned counsel submitted that had there been any deficiencies noted in the applications for refund made by the petitioner, the second respondent ought to have pointed out the same within a period of 15 days from the date of receipt of such application by issuing deficiency memo, instead, what the second respondent done is that, he has issued an acknowledgment indicating that the application has no deficiencies, and thereafter, issued a show cause notice in Form RFD-08 proposing to reject the claim for refund to an extent of Rs. 84,80,988/-in respect of the claim made for the month of January, 2020, which is untenable. 8.3 Therefore, the learned counsel contended that the refund claim cannot be rejected so long as such claim is filed within a period of limitation, viz. 2 years as stipulated under Section 54(1) of the CGST Act., and the delay in filing the supporting document at the time of filing of reply/personal hearing would only extend the time limit to pass an order under Section 54 (7) of the CG....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d on this technical ground as barred by limitation. 10. Thus, while summing up his arguments, the learned counsel for the petitioner would submit that when there is no doubt with regard to the supply of goods made by the petitioner to SEZ Uuits at zero-rated tax and when the applications are filed by the petitioner along with Statement-4, in terms of as per Section 16 (3) (b) of the IGST Act read under Section 54 (1) of the CGST Act, 2017 read with Rule 89 of CGST Rules for the months of December, 2019, January and February 2020, the applications are well within the period of limitation and the claim for refund cannot be negatived in whole or part on any of the aforesaid grounds. 11. Per contra, Mrs.Hemalatha, learned Senior Standing Counsel for the respondent-Income Tax Department would submit the claim made by the petitioner in respect of three months, viz,.December, 2019 and January and February 2020 were partially disallowed on the ground that there was inordinate delay of more than 45 days from the date of supply of goods in obtaining the endorsement, for which, no sufficient reason was shown by the petitioner in their reply to the show cause notice; that as per Rule 30 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on for refund cannot be allowed. 11.2 The learned Senior Standing Counsel further submitted that the petitioner ought to have filed all the supportive documents at the time of filing the applications for refund, and the petitioner, in order to veil the inordinate delay in obtaining the endorsements not filed the documents at the time of filing applications and filed the same only at time of filing reply/personal hearing, and hence, the same were rejected on the ground of limitation. Had the petitioner filed those supporting documents at the time, when the refund applications were filed, obviously, the respondent- Department would be relied on those documents and based on the same, would have allowed the claim. Therefore, the learned Senior Standing Counsel submitted that both the first and second respondent after having found all the aforesaid defects have rightly rejected the petitioner's claim though not wholly but partially and the same requires no interference. 11.3 The learned Senior Standing Counsel further submitted that though the petitioner has taken a stand non-issuance of deficiency memo under Rule 90(3) of CGST Rules vitiates the proceedings to reject the refu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tioned in the invoices differs from the endorsement date mentioned in Statement-4. Inordinate delay in obtaining Endorsement; Inappropriate Endorsement; Endorsement does not state that the goods supplied were for authorized operations : - 14. So far as the rejection of the petitioner's claim on the above said ground is concerned, it is the contention of the petitioner that though the respondent-Department referred to Rule 30 (4) of SEZ Rules, 2006, which mandates that endorsement has to be obtained within 45 days from the date of invoice, as far as the petitioner's case is concerned, the said Rule 30 (4) of SEZ Rules, 2006 will not come into picture since the petitioner had supplied the goods to SEZ unit not without payment of tax under Section 16 (3) (a) but on payment of tax under Section 16 (3) (b) of IGST Act, which enables the petitioner to seek for refund of IGST paid by them, and the provisions of GST Act does not require the petitioner to obtain endorsement within period of 45 days from AO from the date of invoice. 14.1 To resolve the issue as to whether the petitioner has to obtain endorsement within 45 days as per SEZ Rules 2006 or whether as per the prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of Section 16 (3) (b) of the Act, the assessee would be entitled for refund. In the event, without payment of duty, if the goods had entered into SEZ, endorsement shall be made in terms of Rule 30 (4) within 45 days and the same has to be forwarded by the Unit or Developer to the Goods and Services Tax or Central Excise Officer having jurisdiction over the DTA Supplier within 45 days, failing which, the Goods and Services Tax or Central Excise Officer, as the case may be, shall raise demand of tax or duty against the DTA Supplier. 14.3 As far as Rule 30 (4) of SEZ Rule is concerned, the significance of the endorsement made by AO are as follows:- i) The endorsement would only ensure that goods have reached the SEZ. Upon production of endorsement, refund of tax can be made. ii) In the event, if no endorsement is made within 45 days from the date of entry of goods into SEZ, the concerned Officer, viz., the Goods and Services Tax or Central Excise Officer shall raise demand of tax or duty against the DTA Supplier to ensure that either the goods will reach the SEZ within 45 days or else to pay tax. 14.4 In the present case, the question of payment of tax does n....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the ground of inordinate delay in obtaining endorsement. 14.6 As regards the other issue relating to 'Inappropriate Endorsement', as rightly pointed out by the learned counsel for the petitioner, as per SEZ Act or Rules, the AO is not required to make endorsement in any particular manner, since the invoices submitted by the petitioner were endorsed by AO, there is no doubt that the goods were supplied to SEZ units under Section 16 of IGST Act, and the petitioner is entitled for zero-rated tax benefit and delay in obtaining the endorsements, or mistake, if any, in such endorsements are all technical irregularity and so long as the signature is not doubted, the petitioner cannot be penalized for the actions of AO, which is beyond the control of the petitioner and by such means, deprive the petitioner's right to claim benefit under 16 (3) (b) of IGST, instead, the respondent-Department should have assisted the assesseee in rectifying the defects, rather than rejecting the petitioner's applications by citing technical reasons. 14.7 With regard to the issue that 'Endorsement does not state that goods supplied were for authorized operations', it is seen tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the time of filing reply/personal hearing, would be fatal to the petitioner's case, it is beneficial to refer to Rule 90(2) & (3) of CGST Rules, which is extracted hereinbelow:- Rule 90 (2) of CGST Rules, 2017:- ''The application for refund, other than claim for refund from electronic cash ledger, shall be forwarded to the proper officer, who shall, within a period of fifteen days of filing of the said application, scrutinize the application for its completeness and where the application is found to be incomplete in terms of subrule (2) (3) and (4) of Rule 89, an acknowledgment in Form GST RFD-02 shall made available to the applicant through the common portal electronically, clearly indicating the date of filing of the claim for refund and the time period specified in sub-section (7) of section 54 shall be counted from such date of filing. Rule 90 (3) of CGST Rules, 2017:- Where any deficiencies are noticed, proper officer shall communicate the deficiencies to the applicant in Form GST RFD-03 through the common portal electronically, requiring him to file fresh refund application after rectification of such deficiencies'' ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssued instructions from time to time in regard to the attitude which the Officers of the Department should adopt in dealing with assessees in matters affecting their interest and convenience. It appears that these instructions are not being uniformly followed. 2. Complaints are still being received that while ITO's are prompt in making assessments likely to result into demands and in effecting their recovery, they are lethargic and indifferent in granting refunds and giving reliefs due to assessees under the Act. Dilatoriness or indifference in dealing with refund claims (either under s. 48 or due to appellate, revisional, etc., orders) must be completely avoided so that the public may feel that the Government are actually prompt and careful in the matter of collecting taxes and granting refunds and giving reliefs. 3. Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars bef....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onsider as to whether the claim for refund is just and proper. But, in the present case, it is seen that the respondent-Department has acted in a way, which is totally contrary to the Circulars issued by the CBDT. Had the respondent-Department intimated about the deficiencies at the point of time, when the applications were entertained by issuing any deficiency memo, obviously, the petitioner would have rectified those defects pointed out by the respondent-Department and would have made fresh application. Even Rule 90(3) provides an opportunity to the assessee to file fresh refund application after rectification of certain deficiencies pointed out by the Officer concerned. When such being the intention of the Rule, Officer concerned ought to have acted in a manner facilitating the assessee to get his claim for refund. Instead, both the respondents have passed the impugned orders, which are contrary to the provisions of Rule 90 (3) of CGST Rules, 2017 and Circular issued CBDT, dated 11.04.1955. Even Section 54 (1) of CGST states that ''any person claiming refund of any tax and interest, if any, paid on such tax, or any other amount paid by him, may make application before ex....