Mere error in filing Form GSTR-3B cannot deny refund under GST

Chandubhai Bhagwandas Patel Vs Union of India (Gujarat High Court)

1. It was the specific case of Mr. Chandubhai Bhagwandas Patel (hereinafter known as the “petitioner”) wherein even though Form GSTR-1 for the month of August 2019 was correctly filed declaring all the relevant details qua outward supplies appropriately, refund of Integrated Tax (‘IGST’) paid upon export of goods was denied to the petitioner due to mistake being committed in Form GSTR-3B for the said month.

2. The brief facts of the case are as under:

• The petitioner runs a sole proprietary concern named M/s Agrogums. The petitioner is engaged in the business of exporting guar gum powder and is a 100% export-oriented unit. During the month of August 2019, the petitioner exported goods upon payment of IGST by way of debiting input tax credit. At the time of filing GST returns for the month of August 2019, appropriate disclosure qua export of goods was made in Form GSTR-1 however, while filing Form GSTR­3B, export of goods made upon payment of IGST was reported under “Row 3.1(a) – Outward taxable supplies” instead of “Row 3.1(b) – Zero rated supplies” of Form GSTR-3B.
• The petitioner upon gaining knowledge of the mistake committed, approached the office of the jurisdictional assessing officer, however could not receive any material assistance from the Department. Subsequently, the petitioner disclosed the details of exports made in the month of August 2019 in Form GSTR-3B of September 2019 alongwith the details of exports made in the month of September 2019 and hence the petitioner ended up paying tax for the exports made in August 2019 twice, i.e. through Form GSTR-3B of August 2019 as well as through Form GSTR-3B of September 2019.
• Under the category of exports upon payment of IGST, the shipping bill filed is deemed to be a refund application in terms of Rule 96 of the CGST Rules, refund of the IGST paid second time through Form GSTR-3B of September 2019 was refunded automatically to the petitioner, however refund of IGST paid first time, e. during the month of August 2019 was still not granted.
• Therefore, the petitioner filed a refund application under the category of “Others” for the month of August 2019. To the utter shock and surprise of the petitioner, the Department rejected the petitioner’s refund application stating the reason that as Form GST PMT-03 is not available in the Department officer’s login, refund shall not be granted. Form GST PMT-03 is a form through which re-credit of GST is made to the original mode of payment.
• Aggrieved by the refund rejection order, the petitioner filed an appeal online on the GSTN portal in Form GST APL-01. The petitioner’s appeal was rejected again on the same grounds that as Form GST PMT-03 is not available in the Departmental officer’s login, refund cannot be granted. In absence of the Goods and Services Tax Appellate Tribunal, the petitioner therefore preferred a writ petition before the Hon’ble Gujarat High Court.

3. The Hon’ble Gujarat High Court held that:

• Mere erroneous disclosure in Form GSTR-3B cannot be held as a ground for denying refund of IGST paid by the petitioner.
• In case Form GSTR-1 for the month of August 2019 is appropriately filed then in such cases refund cannot be denied.
• The Hon’ble Gujarat High Court thereby directed the competent authority to consider the refund application filed by the petitioner for the month of August 2019 and pass appropriate order in accordance with law and thereby granting refund of the IGST paid by the petitioner along with interest.

4. Conclusion:

• Pursuant to the Hon’ble Court’s order, the petitioner represented by their Advocate and assisted by its Chartered Accountant, filed a fresh refund application online on the GSTN portal under the category – “On account of assessment/provisional assessment/Appeal/Any other order” in order to claim refund of the IGST paid during the month of August 2019 along with interest.
• Post filing of the aforesaid refund application, the competent authority there by granted the petitioner refund of IGST paid along with interest.
• It is pertinent to note here that the facts of the case are identical to the case of ABI Technologies Vs Assistant Commissioner of Customs wherein the Hon’ble Madras High Court held that procedures under Rule 96 of CGST Rules, 2017 cannot be applied strictly to deny legitimate export incentives that are available to an exporter. The Hon’ble Court further held that procedural infraction shall not come in the legitimate way of grant of refund under the IGST Act read with CGST Act and the Rules made thereunder.

The views prescribed hereinabove are strictly personal and do not have any legal impact.

FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT

Learned advocate Mr. Hirak Shah for the petitioner stated that the respondent-authority has already granted the refund and in that view the cause for prosecuting this petition does not survive.

In view of his statement and subsequent development of granting of refund, the petition is disposed of as not survived. Notice

is discharged. Interim relief, if any, stands vacated.