Sri Krishna Textile Mills Vs Assistant Commissioner (Madras High Court)
GST Refund Application Can’t Be Rejected merely because inverted turnover does not match the GSTR 1, GSTR 3B and GSTR 2A returns without following the mandate of Circular No. 135/05/2020 – GST dated 31.03.2020.
The Madras High Court intervened in the case of M/S. Sri Krishna Textile Mills, challenging the rejection of their refund application based on an alleged mismatch between inverted turnover and GST returns. This landmark ruling sheds light on the importance of adhering to procedural guidelines and considering relevant documents in refund processing.
Sri Krishna Textile Mills, engaged in cotton yarn manufacturing, filed a refund application due to the inverted duty structure, where input taxes exceeded output taxes. Despite submitting invoices from suppliers and those issued for outward supplies, the application was rejected by the department, citing a discrepancy in turnover figures between GSTR returns.
The petitioner contended that the rejection failed to consider the relevant documents and overlooked Circular No. 135/05/2020 – GST, which outlines guidelines for refund processing. The High Court, upon scrutiny, found the department’s rejection lacked proper examination as per GST enactments and the mentioned circular.
The court emphasized the necessity of processing refund applications in accordance with statutory provisions and circular guidelines. It set aside the impugned order and directed the department to reassess the application, allowing the petitioner to submit additional documents within a specified timeframe. This decision underscores the significance of procedural compliance and fair consideration of evidence in refund matters.
