TaxTMI 
TaxTMI 
2023 (9) TMI 1518
X X X X Extracts X X X X
X X X X Extracts X X X X
....od of 2 years of the relevant date as defined in Explanation after sub-section 14 of Section 54 of the CGST Act is ultra vires to Section 54 of the CGST Act, 2017; B. this Hon'ble Court may be pleased to issue a writ of certiorari or writ in the nature or any other appropriate writ, calling upon for the records of the petitioner's case and after going into legality and proprietary thereafter quash and set aside the said Order-in-Appeal No. AHM-EXCUS-001-APP-JC-020/2020-21 dated 09.11.2020 passed by respondent No. 4 and consequently to allow the refund of unutilized ITC claimed under Inverted Duty Structure in terms of Section 54(3) of the CGST Act for the period December 2017 along with interest in terms of provisions of CGST Act, 2017; C. this Hon'ble Court may be pleased to issue a writ of mandamus or a writ in the nature of mandamus, or any other appropriate writ, direction or order, directing the respondents, its officers and or their servants and subordinates to allow the refund of unutilized ITC claimed under Inverted Duty Structure in terms of Section 54(3) of the CGST Act for the period December 2017 along with interest in terms of provisions of CGST Act 2017; D. Pend....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... deficiency memo was again issued by the respondent No. 3 against the rectified refund application, the petitioner filed second refund application with the same Annexures as mentioned in the rectified refund application vide Form RFD-01 on 13th February 2020 seeking refund of Rs.1.19 Crores. [3.7] Thereafter, the respondent No. 3 accepted the second rectified refund application and an acknowledgement in Form RFD-02 dated 14th February 2020 was issued with remarks "documents as per circular 125/44/2019-GST dated 18.11.2019 are uploaded. Accordingly, RFD-02 issued as per Rule 90, 91 and 95 of the CGST Rules, 2017". [3.8] Thereafter, the respondent No. 3 issued show cause noticevide Form RFD-08 dated 18th February 2020 alleging that the second rectified refund application should be rejected on the ground that there is a delay in filing the refund application. [3.9] The petitioner filed reply to the show cause notice stating that due date should be considered as per the date of filing original refund application and the delay was due to the deficiency memos issued by the respondent No. 3 and the claim was already lodged by them vide their original refund application dated 16th Decem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....; * * (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than-- (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax oninputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll, 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 complete in terms of sub-rule (2), (3) and (4)of rule 89, an acknowledgement in FORM GST RFD-02 shall be 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 subsection (7) of section 54 shall be counted from such date of filing. (3) Where any deficiencies are noticed, the proper officer shallcommunicate the deficiencies to the applicant in FORM GST RFD03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies. (4) Where deficiencies have been communicated in FORM GSTRFD-03 under the State Goods and Service Tax Rules, 2017, the same shall also deemed to have been communicated under this rule along with the deficiencies communicated under sub-rule (3)." [6] Vide Notification No. 15/2021-Central Tax dated 18th May 2021, the following proviso was inserted after sub-Rule (3) of the Rule 90 of the CGST Rules. The amendment is reproduc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the last date on completion of two years, the claim would always be barred by limitation if the deficiency memo is issued. Reliance was placed on the decision of the Hon'ble Delhi High Court in the case of National Internet Exchange of India vs. Union of India reported in (2023) 9 Centax 405 (Del.), wherein in similar facts, the Hon'ble Delhi High Court, after considering the effect of sub-rule (2), (3) and (4) of Rule 89 of the CGST Rules as well as sub-rule (5) of Rule 90 of the CGST Rules held that in terms of Section 54(1) of the CGST Act, an application is required to be made in the prescribed form and manner within two years from the relevant date and once the petitioner has complied with the said requirements, the period of limitation would stop running notwithstanding that the proper officer required further document or material to satisfy himself that the refund claim was due to the petitioner. [7.4] It was, therefore, submitted by learned advocate Mr. Modh that as the petitioner has filed refund claim within the prescribed time limit laid down under Section 54 of the CGST Act, subsequent rectified refund claim along with required documents or prescribed format on dire....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefore, 15 days are to be excluded from date of filing first rectified refund claim on 27th January 2020 to 11th February 2020 and the petitioner has filed the second rectified application on 13th February 2020. It was, therefore, submitted that in all, 26 (11 + 15) days are required to be excluded from the period of limitation of two years by adding 26 days to last date of 22nd January 2020, therefore, time to file refund claim would be available upto 27th February 2020, however, the second rectified application was filed by the petitioner on 13th February 2020, hence, the refund claim was lodged within a period of limitation. [7.8] For making above submissions, reliance was placed on the Notification No. 15/2021 dated 18th May 2021, whereby proviso to Rule 90(3) of the CGST Rules is introduced for exclusion of interim time period from the date of issuance of defect memo upto the date of filing the rectified refund application for calculating two years from the relevant date by resolving the issue of refund applications. It was, therefore, submitted that the amendment has clarified the intention of the legislature that rectified the refund application is an extension of the ori....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the affidavit-in-reply filed on behalf of the respondents Nos.1, 2, 3 and 4: "4. The captioned petition is preferred challenging para 12 of Circular No. 125/44/2019-GST dated 18.11.2019 so far as it relates, directing to file the rectified refund claim within a period of 2 years or the relevant date as defined under the explanation after sub-section 14 of Section 54 of the CGST Act as ultra-vires Section 54 of the CGST Act, 2017 and consequently the refund of unutilized ITC claimed under Inverted Duty Structure in terms of Section 54(3) of the CGST Act, 2017. 5. Pertinently, the petitioner had filed the refund claim for the month of December 2017 only on 16.12.2019. In furtherance thereto, the adjudicating authority issued a deficiency memo to the petitioner on 27.12.2019 under the provisions of Rule 90(3) of the CGST Rules, 2017 with the remarks "Supporting documents not attached. Statement -IA is filled online is incomplete". In pursuance thereof, the petitioner filed a revised refund application on 27.1.2020, for which yet again deficiency memo was issued by the authority on 11.2.2020 with the remarks "Invoice(s) not shown in GSTR-2A but ITC is claimed in Annexure-B as e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m the date of filing of the original refund application or from the date of filing of the rectified refund application after receipt of the deficiency memo from the respondents authorities. [10] Such question is considered by the Hon'ble Delhi High Court in the case of National Internet Exchange of India (supra), wherein after considering the provisions of Section 54 of the CGST Act and the Rule 90 of the CGST Rules, it was held as under: "18. It is apparent from the above that once an application is complete in terms of Sub-rule (2), (3) and (4) of Rule 89 of the CGST Rules, the same is necessarily required to be accepted. 19. An application can be rejected as deficient only where any deficiencies are noted. The contextual reading of Sub-rule (3) with Sub-rule (2) of Rule 90 of the CGST Rules, indicates that the deficiencies referred to in Sub-rule (2) of Rule 90 of the CGST Rules are those that render an application incomplete in terms of Sub-rules (2), (3) and (4) of Rule 89 as stipulated in Sub-rule (2) of Rule 90. Thus, if an application is complete in terms of Sub-rule (2), (3) and (4) of Rule 89 of the CGST Rules, the same cannot be rejected, relegating the taxpayer to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ored or disregarded. 25. As noted above, in terms of Section 54(1) of the CGST Act, anapplication is required to be made in the prescribed form and manner before two years from the relevant date. It is clear that the petitioner had complied with the said requirement inasmuch as it had filed an application for refund on 31.10.2019 in the "form and manner" as prescribed in the CGST Act and the CGST Rules. Thus, in terms of Section 54(1) of the CGST Act, the period of limitation would stop running notwithstanding that the proper officer required further documents or material to satisfy himself that the refund claimed was due to the petitioner. 26. This Court in an earlier decision in Bharat Sanchar Nigam Limited v. Union of India & Ors.: 2023:DHC:2482-DB and in similar circumstances held as under: "28. We are of the view that Rule 90(3) cannot be applied in the manner as sought to be done by the Adjudicating Authority. Merely because certain other documents or clarifications are sought by way of issuing a Deficiency Memo, the same will not render the application filed by a taxpayer as non est. 29. If the application filed is not deficient in material particulars, it cannot be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e excluded 16.12.2019 27.12.2019 11 27.01.2020 11.02.2020 15 13.02.2020 Nil The refund claim of the petitioner pertains to December 2017, due date of filing return would be 22nd January 2018, two years period of limitation therefore would be over on 22nd January 2020. By adding 26 days as above, last date of filing refund would be 27th February 2020 whereas the petitioner filed second rectified refund claim on 13th February 2020. [12] Therefore, applying the Circular No. 15/2021 also, the refund claim of the petitioner cannot be rejected and the reliance placed by the respondent on Clause 12 of Circular No. 125/44/2019-GST dated 18th November 2019 would not be applicable. [13] Considering the facts of the case where the first deficiency memo dated 27th December 2019 is only for not attaching supportive documents by the petitioner and the first rectified refund application was filed on 27th January 2020 along with requisite documents, as required by the respondents authorities. Thereafter, the second deficiency memo dated 11th February 2020 was issued with the same reasons for providing documents with the remarks "invoice(s) not shown in GSTR-2A but ITC is claimed....