Judgment
2025:KER:24345 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 21ST DAY OF MARCH 2025 / 30TH PHALGUNA, 1946 WP(C) NO. 33952 OF 2022 PETITIONER:
M/S AVT MC CORMIC INGREDIENTS PVT LTD 24/4496, ALUVA ERNAKULAM REPRESENTED BY ITS’ ASSISTANT VICE PRESIDENT – FINANCE AND ACCOUNTS SRI. GEORGE. P. MATHEW, PIN - 683105 BY ADVS.
A.KUMAR (Sr.)
P.J.ANILKUMAR G.MINI(1748) P.S.SREE PRASAD JOB ABRAHAM RESPONDENTS:
1 DEPUTY COMMISSIONER, OFFICE OF THE DEPUTY COMMISSIONER CENTRAL TAX& CENTRAL EXCISE ALUVA DIVISION, VATHIATTU TOWER THOTTAKATTUKARA ALUVA, ERNAKULAM DIST., PIN - 683108 2 THE ASSISTANT COMMISSIONER OFFICE OF THE DEPUTY COMMISSIONER CENTRAL TAX& CENTRAL EXCISE ALUVA DIVISION, VATHIATTU TOWER THOTTAKATTUKARA ALUVA, ERNAKULAM DIST.- 683108, PIN - 683108 BY ADVS.
SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE P.G.JAYASHANKAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.03.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
2025:KER:24345 W.P.(C). No.33952 of 2022 -:2:- BECHU KURIAN THOMAS, J.
--------------------------------------- W.P.(C). No.33952 of 2022 --------------------------------------- Dated this the 21st day of March, 2025 JUDGMENT Petitioner challenges Exhibit-P4 order rejecting an application for refund of Input Tax Credit paid on export of goods and services.
2. Petitioner claims to be 100% export oriented unit engaged in the manufacture and export of spices, herbs and flavours. In the course of business, petitioner procures raw materials as well as finished goods for exports. Supply of goods and services for export are to be treated as ‘Zero rated supplies’. Petitioner at times follow the practice of submitting letters of undertaking without payment of integrated tax and claim refund of unutilised Input Tax Credit or pay the integrated tax and claim refund under the rebate method as provided under the Central Goods and Services Tax Rules, 2017 (for short, ‘the CGST Rules’).
3. For the period from April 2018 till May 2018, when attempts were made by the petitioner to file an application for refund in the electronic mode, an error was displayed, thereby preventing them from making the application. Thereafter, on 27.05.2022, petitioner filed a manual application for refund for the months of April and May 2018.
Though the application should have been filed by May 2020, in view of
2025:KER:24345 W.P.(C). No.33952 of 2022 -:3:- the order of the Supreme Court in suo motu case relating to Covid-19 pandemic, the limitation period for filing such applications were extended by 90 days from 01.03.2022 and hence, petitioner’s application is stated to be within time. However, by an order dated 10.08.2022, the application for refund was rejected, pointing out that as per Circular No.125/44/2019-GST dated 18.11.2019, refund claims ought to be submitted electronically. Aggrieved by the rejection of petitioner’s application for refund, this writ petition has been filed.
4. A statement has been filed on behalf of the respondents pointing out that from July 2017 to December 2017, petitioner had filed refund claims under Section 54(3) of the Central Goods and Services Tax Act, 2017, (for short, ‘the CGST Act’) and the system revealed that petitioner had submitted refund claim through the common portal stating refund amount for the relevant period as ‘Nil’. It is also stated that the application for refund filed manually. Subsequently, claiming refund of Rs.1,25,68,051.56/- cannot be accepted and processed in view of Rule 89 (1) of the CGST Rules read with Section 54 of the CGST Act. Circular No.125/44/2019-GST dated 18.11.2019 is also relied upon, to justify the refusal to consider the application for refund.
5. I have heard Sri. A. Kumar, the learned Senior Counsel instructed by Smt. G. Mini, on behalf of the petitioner and Sri. P. G. Jayashankar, the learned Standing Counsel for the
2025:KER:24345 W.P.(C). No.33952 of 2022 -:4:- respondents.
6. The application for refund submitted by the petitioner has been rejected solely on the ground that a manual application is not maintainable relying upon Rule 89 of the CGST Rules. The aforesaid Rule describes that a person claiming refund of any tax, interest or penalty, may file an application electronically in Form GST RFD-01 through the common portal, either directly or through a Facilitation Centre. However, Rule 97A of the CGST Rules, which is incorporated on 15.11.2017, stipulates that, notwithstanding anything contained in Chapter X, any application/intimation, notice, order or certificate referred to in that chapter shall include manual filing as well. The purpose of Rule 97A of the CGST Rules is explicit. Both electronic applications as well as manual applications are permitted to be filed. If electronic application for refund is the only mode contemplated, the provisions of Rule 97A would become redundant and even a dead letter.
Such an interpretation cannot be adopted. In view of Rule 97A of the CGST Rules, Exhibit-P4 order, rejecting petitioner’s application for refund solely on the ground that it was not submitted electronically is perverse and legally erroneous.
7. In the decision in Laxmi Organic Industries Ltd. Vs.
Union of India and Others [2021 SCC Online Bom. 10539], the Bombay High Court had observed that since Rule 97A contains a
2025:KER:24345 W.P.(C). No.33952 of 2022 -:5:- non-obstante clause, it is intended to override Rules 89 to 97 of the CGST Rules. It was also observed that the plain and simple construction of Rule 97A is that despite Rule 89 providing for electronic filing of applications for refund on the common portal, in respect of any process or procedure prescribed in Chapter X, any reference to electronic filing of an application on the common portal shall, in respect of that process or procedure, include manual filing of the said application. It was finally concluded that the circular would certainly be applicable to all applications filed electronically on the common portal, but cannot affect or control Rule 97A of the CGST Rules or derogate from it. I am in complete agreement with the above proposition.
8. Apart from the above, the learned Senior Counsel contradicted the contention of the respondents that the refund already applied for till January 2020 showed ‘Nil refund’, and hence refund applications filed subsequently cannot be entertained, as being without any basis, since the impugned order does not reflect any such reason.
On a perusal of the impugned order, it is evident that the rejection of petitioner’s application for refund is not on account of any reason that the refund application already submitted by the petitioner showed the amount of refund as ‘Nil’. The impugned order has not referred to any such reason and instead, found the application not liable to be processed only for the reason that it was filed manually.
2025:KER:24345 W.P.(C). No.33952 of 2022 -:6:- 9. In view of the above, the impugned order Exhiit-P4 dated 10.08.2022 is hereby set aside, and the 2nd respondent is directed to process Exhibit-P1 application for refund and pass appropriate orders, in accordance with law, bearing in mind the observations made above, as expeditiously as possible, at any rate within a period of four weeks from the date of receipt of a copy of the judgment.
The writ petition is allowed as above.
Sd/-
BECHU KURIAN THOMAS JUDGE jka/21.03.25.
2025:KER:24345 W.P.(C). No.33952 of 2022 -:7:- APPENDIX OF WP(C) 33952/2022 PETITIONER’S EXHIBITS Exhibit P1 TRUE COPY OF THE APPLICATION FOR REFUND DATED 27.05.2022.
Exhibit P2 TRUE COPY OF THE D COMMUNICATION DATED 13.06.2022.
Exhibit P3 TRUE COPY OF THE REPLY DATED 21.06.2022.
Exhibit P4 TRUE COPY OF THE ORDER REJECTING APPLICATION FOR REFUND DATED 10.08.2022.