National Internet Exchange of India Vs Union of India & Ors. (Delhi High Court)
Introduction: The Delhi High Court recently delivered a landmark judgment in the case of the National Internet Exchange of India vs. Union of India & Ors. This case delves into the nuances of the GST refund mechanism and the implications of deficiencies in the application process.
The Background: The National Internet Exchange of India, the petitioner, had its claim for the refund of Integrated Goods and Services Tax (IGST) rejected. The Department of Trade and Taxes argued that the petitioner’s application was submitted beyond the stipulated period under Section 54(1) of the CGST Act, 2017.
Main Contention: Despite the rejection, the petitioner emphasized that its initial refund application was submitted within the prescribed timeframe. The subsequent applications were just clarifications regarding deficiencies and should not be counted as a new application.
Impugned Circular and its implications: As per Circular No. 125/44/2019-GST, once a deficiency memo is issued, the refund application stops processing. The taxpayer needs to file a fresh application, and this should also be done within the stipulated two-year period. If a fresh application, post a deficiency memo, is submitted after the stipulated time, the claim gets rejected.
Factual Context: The petitioner, a non-profit firm registered in Delhi, mainly focuses on internet service exports and domain management. They filed a refund claim for ₹51,28,263/- being the IGST paid on zero-rated supplies. However, multiple deficiency memos were issued, requiring the petitioner to reapply.
Legal Analysis:
