Case Law Details
Dharmdeep Commodities Pvt. Ltd. Vs State of Gujarat (Gujarat High Court)
Introduction: In a recent case before the Gujarat High Court, Dharmdeep Commodities Pvt. Ltd. sought relief through a petition under Article 226 of the Constitution of India, highlighting the challenges faced by businesses in claiming refunds under the Goods and Services Tax (GST) Acts. The case, titled Dharmdeep Commodities Pvt. Ltd. vs State of Gujarat, sheds light on the issues arising from a faulty GSTN portal and the subsequent impact on refund claims.
Petitioner’s Plea for Relief: The petitioner, Dharmdeep Commodities Pvt. Ltd., requested the court to issue a writ of mandamus or any other appropriate writ, directing the respondent authorities to grant refunds under the GST Acts. The key points of the petitioner’s plea included:
- Urgent consideration of their refund application dated 25.7.2019.
- Declaration that the online system restricting further refund claims for the same period is contrary to GST Acts.
- Recognition that manual refund claims should be accepted until the online system is rectified.
- Specific direction to amend the online portal to allow multiple refund claims within the statutory time limit.
Technical Problems with the GSTN Portal: Learned advocate Mr. Uchit Sheth, representing the petitioner, emphasized that the petitioner approached the court due to the respondents’ failure to decide on the refund application for December 2017 and January 2018. These delays were attributed to technical issues within the GSTN portal.
The petitioner asserted that the portal, at the relevant time, lacked the provision for re-credit of excess amounts. Consequently, the refund for November 2017 was considered for a higher amount, while the subsequent applications for December 2017 and January 2018 were processed for lower amounts due to the exhaustion of the Electronic Credit Ledger.
Court’s Directive: In response to the petitioner’s submissions, the Gujarat High Court directed the respondent authorities to consider the representation made by the petitioner within a four-week period. The authorities were further instructed to provide findings and conclusions after affording the petitioner an opportunity for a hearing.
Future Proceedings: The case has been scheduled to stand over until 28th February 2024. Additionally, the court has permitted direct service for respondents 1, 2, and 3, while service for respondent 4 is permitted through email.
Conclusion: The Dharmdeep Commodities Pvt. Ltd. vs State of Gujarat case underscores the challenges businesses face when dealing with technical glitches in the GSTN portal. The court’s intervention and directive to address the petitioner’s concerns reflect the importance of a seamless and efficient online system for GST processes. This case serves as a reminder of the ongoing efforts required to streamline and enhance the functionality of digital platforms to ensure a smoother experience for businesses operating under the GST regime.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
[1] By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs:
“A. This Hon’ble Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ or order directing the respondent authorities to grant refund to the petitioners under the GST Acts in terms of application dated 25.7.2019 (annexed at Annexure I);
B. It may please be held and declared that the online system of not allowing the petitioners to claim further refund for the same period within the statutory time limit is contrary to the provisions, object, purpose and scheme of the GST Acts;
C. It may please be held and declared that till the online system is rectified, the respondents are bound to accept and act upon manual refund claims in respect of refund admissible under the GST Acts;
C1. This Honourable Court may be pleased to direct the respondents to amend the online portal to allow the petitioners to file refund claims on more than one occasion within the statutory time limit.
D. Pending notice, admission and final hearing of this petition, this Hon’ble Court may be pleased to direct the respondent authorities to grant refund to the petitioners under the GST Acts in terms of application dated 25.7.2019 (annexed at Annexure I);
E. Ex parte ad interim relief in terms of prayer C may kindly be granted;”
[2] Learned advocate Mr. Uchit Sheth for the petitioner submitted that the petitioner has approached this Court as the respondents authorities did not decide the application filed by the petitioner for refund for the months of December 2017 and January 20 18, which was denied due to technical problems in the GSTN portal of the respondent.
[3] It was submitted that the petitioner was entitled to the refund for the month of November 2017, however, the portal has taken the outstanding balance in the Electronic Credit Ledger as on February 2018 when the petitioner filed refund application, and accordingly, the refund for November 2017 was considered for higher amount. Whereas, the refund application for December 2017 and January 2018 was considered for lower amount as the sufficient balance in the Electronic Credit Ledger was already utilized by the portal while considering the refund application for November 2017. It was submitted that at the relevant time, the facility for re-credit of excess amount was not available on the portal, which was made available only in the year 2019. It was submitted that in such circumstances, the petitioner preferred a representation before the respondent authority to consider such problems because of the faulty GSTN portal.
[4] Considering the above submissions, the respondents authorities are directed to consider the representation made by the petitioner within a period of four weeks from today and place the findings and conclusion arrived at, after giving an opportunity of hearing to the petitioner, on record of this petition.
[5] Stand over to 28th February 2024. Direct service for respondents Nos.1, 2 and 3 is permitted. Direct service for respondent No.4, through E-mail, is permitted.
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