Tarinika & Ors. Vs Commissioner of Central Goods & Services Tax (Calcutta High Court)
Communicating inadequate information in Deficiency Memo Cannot Prejudice Taxpayer-Calcutta HC
Issue involved: Whether refund applications under Section 54 of the CGST Act, 2017 can be re-filed when deficiency memos were not communicated to the taxpayer in the prescribed manner within the 15-day timeline under Rule 90(2) and 90(3) of the CGST Rules.
Summary and observations of the court: The petitioner had filed GST refund applications for multiple tax periods. As per Rule 90(3) of the CGST Rules, any deficiencies must be communicated within 15 days via the common portal. However, the deficiency memos uploaded on the portal did not disclose specific reasons or attach any documents explaining the rejection. This prompted the petitioner to approach the Court.
The Calcutta High Court held that:
- The right to refile a refund application accrues only when deficiencies are properly communicated through the common portal.
- Merely uploading a generic memo without specifying reasons or attachments is insufficient compliance with Rule 90(3).
- The officer’s failure to properly communicate deficiencies on the viewable portion of the portal created a communication gap for which the petitioner cannot be penalized.
- The portal accessed by the taxpayer and the officer appear to function differently, undermining the intent of electronic communication.
In view of the above observations, the High Court allowed to re-file the refund applications.
