Madras HC Directs Reconsideration of IGST Refund Based on Available Documents

Colors of Rainbow Vs Assistant Commissioner (ST) (Madras High Court)

The Madras High Court recently rendered a significant judgment in the case of “Colors of Rainbow vs Assistant Commissioner (ST).” The case revolves around the denial of an IGST refund claim, citing an alert raised by the Director General of Data Analytics & Risk Management (DGRAM).

The petitioner, involved in the export of goods, had claimed IGST refunds for the months of March to May 2023. While refunds for April and May were sanctioned, the refund for March was initially rejected. The rejection was based on the failure to upload certain supporting documents, despite the petitioner’s claim that all necessary paperwork was available on the GST portal.

The court proceedings saw arguments from both sides: the petitioner contended that the refund process should have been automatic, relying on documents already accessible on the portal. Conversely, the respondents, represented by government counsel, acknowledged the need for reconsideration, suggesting that the petitioner be allowed to submit additional documents if required.

Upon examining the impugned order, the High Court found the rejection of the March 2023 refund claim unjustified, emphasizing the automatic nature of the refund process for exporters. Consequently, the court set aside the earlier decision and instructed the authorities to re-evaluate the claim, ensuring all available documents on the portal are duly considered. The respondents were directed to cooperate in this process, with a clear timeline set for the resolution of the matter.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

An order dated 05.06.2023 rejecting the petitioner’s claim for refund under Section 54 of applicable GST enactments is the subject of challenge in this writ petition.

2. The petitioner exported goods on payment of IGST during the period running from March 2023 to May 2023 and claimed refund of the IGST paid thereon. While the refund for the months of April to May 2023 was sanctioned on 07.09.2023, the refund for the month of March 2023 was anctioned. Upon coming to know that the refund claim was not ssed on account of an alert raised by the Director General of Data Analytics & Risk Management (DGRAM), the petitioner reapplied on 28.05.2023. Such application was rejected by the order impugned herein.

3. Learned counsel for the petitioner submits that refund in relation to export of goods is an automatic process and that the petitioner’s refund claim in respect of the months of April to May 2023 was processed and sanctioned, whereas the present refund claim for the month of March 2023 was rejected erroneously on the ground that supporting documents have not been uploaded. He submits that all necessary documents are available in the portal and it is not necessary for the petitioner to submit any supporting

4. Mr. C. Harsha Raj, learned Additional Government Pleader, accepts notice for the 1^st respondent. Mr.Rajendran Raghavan, learned senior standing counsel, accepts notice for respondents 2 & 3. Mr.C.Harsha Raj submits that the matter may be directed to be reconsidered by taking note of ments already available in the portal and by permitting the petitioner to ditional documents, if any.

5. On examining the impugned order, the only reason specified therein for rejecting the refund claim is that the dealer had not uploaded supporting documents. Learned counsel for the petitioner submitted that the processing of the refund claim is automatic and on the basis of documents already available on the portal such as shipping bills, invoices and the like. In these circumstances, the matter requires reconsideration.

6. For reasons set out above, the impugned order dated 05.06.2023 is set aside and the matter is remanded to the 1^st respondent for The 2^nd and 3^rd respondents are directed to co-ordinate with the 1^st respondent in relation to the risk alert. The 1^st respondent is directed to take into consideration all documents already available on the portal. The petitioner is permitted to submit additional documents, if any, to assist in the process. Upon such reconsideration, the 1^st respondent is directed to pass orders on the refund application within two months from the date of receipt of a copy of this order.

7. The writ petition is disposed of on the above terms without any as to costs. Consequently, connected miscellaneous petition is closed.