Case Law Details
Sunil Kumar Poddar Vs Additional Commissioner(Appeal) (Calcutta High Court)
In a recent legal development, the Calcutta High Court delivered a significant judgment in the case of Sunil Kumar Poddar vs. Additional Commissioner (Appeal) concerning the rejection of a Goods and Services Tax (GST) refund. The petitioner, engaged in zero-rated supply of goods, sought refund of unutilized Input Tax Credit but faced rejection on the grounds of non-uploading of shipping details in Form GST RFD-01. This article delves into the details of the case and the court’s ruling.
Background: The petitioner had made zero-rated supply of goods and filed Form GST RFD-01 seeking a refund of unutilized Input Tax Credit. However, the claim was rejected due to the petitioner’s failure to upload shipping details in the official portal. The appeal before the Additional Commissioner of CGST & CX, Siliguri Appeal Commissionerate, was also dismissed on March 23, 2023.
Contentions of the Petitioner: The petitioner, in his grounds of appeal, contended that due to a misconception of the law, the shipping details were not uploaded at the time of seeking the refund. The shipping bills were, however, annexed at the time of preferring the appeal. The petitioner sought to set aside the appellate authority’s order and a direction for the refund of the entire amount.
The Circular and Respondent’s Stand: The appellate authority relied on Circular No. 125/44/2019, which emphasized the verification of shipping bill details through the ICEGATE site. The authorities argued that the petitioner, by not incorporating shipping details in GSTR-1, failed to comply with the law, justifying the rejection of the refund claim.
Court’s Observations and Ruling: The court acknowledged that the petitioner possessed all relevant shipping details but failed to upload them due to a misconception of the law. The attempt to amend GSTR-1 to include shipping details was thwarted by the portal’s rejection, citing a prior refund claim against the shipping bill.
The court held that if a taxpayer possesses valid shipping bills but cannot upload them at the time of the refund claim, the law should allow rectification of such inadvertent mistakes. The court criticized the rigidity of the system and emphasized the need for authorities to have the power to address difficulties faced by taxpayers.
While noting the authorities’ contention about the electronic system’s limitations, the court directed the Assistant Commissioner to consider the hardcopy of shipping bills submitted by the petitioner. The petitioner was also permitted to amend details in GSTR-1 for verification.
Conclusion: The judgment highlights the need for flexibility in the GST refund process, recognizing that genuine errors can occur, and the law should provide avenues for rectification. The court’s decision in Sunil Kumar Poddar vs. Additional Commissioner serves as a reminder that procedural requirements should not override substantive justice, especially when the taxpayer possesses valid documentation. This case sets a precedent for a more nuanced and pragmatic approach in dealing with refund claims in the context of the Goods and Services Tax.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The petitioner made zero rated supply of goods and seeks refund of the unutilized accumulated Input Tax Credit. He filed Form GST RFD-01 but his prayer stood rejected on the ground that the petitioner failed to upload the shipping details. The appeal preferred before the Additional Commissioner of CGST & CX, Siliguri Appeal Commissionerate also stood rejected vide order dated March 23, 2023.
The petitioner is aggrieved by the same. The petitioner has annexed in the writ petition the shipping bills of which he claims refund. As the bills could not be uploaded in the official portal, his claim for refund has been negated.
The appellate authority has relied upon the Circular No. 125/44/2019 dated November 18, 2019 wherein it has been clearly mentioned that in case of refund claim on account of export of goods without payment of tax, the shipping bill details shall be checked by the proper officer through ICEGATE SITE wherein the officer will be able to check details of EGM and shipping bill by keying in port name, shipping bill number and date.
In the said Circular it has been advised that while processing the refund claims, information contained in Table 9 of Form GSTR-1 of the relevant tax period as well as that of the subsequent tax periods should also be taken into cognizance, wherever applicable.
The petitioner has in his grounds of appeal before the appellate authority mentioned that due to wrong appreciation of the provision of law, the shipping details could not be uploaded at the time of seeking refund. Admittedly, the shipping bills were forwarded and annexed at the time of preferring the appeal.
The petitioner prays for setting aside the order passed by the appellate authority and further directing refund of the entire amount.
Learned advocate representing the CGST authority submits that as the petitioner failed to upload the relevant details in Form GSTR 1, accordingly, the claim of the petitioner stood rejected. There is no provision under which the claim can be revived at this stage.
It has been submitted that as law requires submission of the shipping details for obtaining refund, the petitioner was legally bound to supply the details of the shipping bills. On account of non-incorporating the details of the shipping bills in the GSTR-1 in the GSTN portal, the prayer for refund of the petitioner has been rightly rejected. The respondents categorically deny that there was any technical glitch at the time of amendment of the requisite Form as alleged by the petitioner.
I have heard the submissions made on behalf both the parties.
In the present case, the petitioner has in his possession all the relevant shipping details but for the misconception of law the petitioner did not upload the shipping details at the time of claiming refund in Form GSTR-1.
According to the provisions of law, the shipping details are required to be uploaded.
It appears that after getting to know the mistake committed by him in not uploading the shipping details, the petitioner at one point of time tried to amend the GSTR-1 for the purpose of incorporating the shipping details, but the same was not permitted in the portal with the remark that ‘ you have already claimed refund against the shipping bill/bill of export, hence you cannot amend the details.’
It appears that on one hand the petitioner is not being permitted to amend the GSTR-1 and on the other hand hardcopies of the shipping bills submitted by the petitioner at the time of preferring appeal is not being considered. The authority at the time of consideration of the appeal of the petitioner ought to have appreciated that the petitioner will not gain anything by holding back the shipping bills. The petitioner would lose a sum of nearly five crore of rupees on account of not uploading the shipping bills in proper time.
It is not the case of the respondents that the shipping bills were generated later on. It is also not the case that the shipping bills are not genuine.
If a tax payer possesses the valid shipping bills, but for some reason may not have been able to upload the same in Form GSTR 1 at the time of claiming refund, the law should not be so rigid so as not to permit the claimant to rectify the mistake that has been committed inadvertently. There is nothing on record to show that the petitioner deliberately did not upload the required details.
Circular No. 125 relied upon by the respondent authority mentions about the necessary check details which the petitioner ought to have complied with.
It has been highlighted by the respondent authorities that presently the entire system is being maintained electronically with hardly any manual intervention and, accordingly, at this stage it is not possible to take into consideration the shipping details of the petitioner manually.
The aforesaid contention of the respondents may be true but the authorities ought to have the power to remove difficulties in case a tax payer intends to avail the benefit as mandated in law.
Apart from the fact that the petitioner did not upload the shipping details in Form GSTR-1, there is no reason for withholding or rejecting the claim for refund sought for by the petitioner.
In view of the above, the respondent no. 2 being the Assistant Commissioner, CGST & Central Excise, Jalpaiguri Division is directed to take into consideration the hardcopy of the shipping bills submitted by the petitioner for consideration of his prayer for refund of the unutilized accumulated Input Tax Credit on account of zero rated supply.
The petitioner may be permitted to amend the details in Form GSTR-1 so that the authority can verify the genuineness of the shipping bills. If the bills relied upon by the petitioner are found to be genuine, then the aforesaid respondent shall consider the prayer of the petitioner for refund in accordance with law.
Steps shall be taken in the matter at the earliest but positively within a period of eight weeks from the date of communication of this order.
The writ petition stands dismissed.
Affidavit-of-service filed in Court today is taken on record.
Urgent certified photocopy of this order, if applied for, be supplied to the parties expeditiously on compliance of usual legal formalities.
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