S/S Manoj Handlooms PVT. LTD. vs. Union Of INDIA And 3 Others

Held

The Court allowed the writ petition, setting aside the impugned orders dated 26.02.2021, 01.04.2021, and 15.05.2021. The Court reasoned that the facts were undisputed, including the entitlement to refund arising from the finalized appeal order dated 08.01.2021 and the filing of the refund application through the online mode. The issuance of an acknowledgement on Form GST-RFD-02 indicated that the application was considered complete upon scrutiny. The Court found the revenue authorities' conduct in declining the refund on the excuse of the application being incomplete to be unconvincing. The Court held that in cases where refund claims arise solely from appeal orders, authorities cannot plead ignorance of such orders. Rejecting such claims forces litigation and defeats claims for interest. The Court directed the respondent no.3 to pass a fresh order concerning the acknowledgement on Form GST-RFD-02 dated 05.02.2021 and to pay any refund found due, along with statutory interest for the period the application remained pending since 05.02.2021. The Court also directed communication of this order to the Commissioners of CGST and UPGST for appropriate directions.

Facts

The petitioner, M/s Manoj Handlooms Pvt. Ltd., filed a writ petition challenging orders dated 26.02.2021, 01.04.2021, and 15.05.2021, and a notice in Form GST-RFD-08 dated 17.07.2021. Previously, an appeal authority had allowed the petitioner's appeal and set aside an order demanding a deposit of Rs. 15 lacs, directing the refund of the entire amount. This appeal order dated 08.01.2021 had attained finality. The petitioner then filed a refund application on 05.02.2021, which received an acknowledgement on Form GST-RFD-02. Despite this, the refund was rejected by the respondent authority on 26.02.2021, citing non-submission of documentary evidence regarding payment of tax and penalty. The petitioner's subsequent refund applications were also rejected.

Key Issues

1. Whether the issuance of an acknowledgement on Form GST-RFD-02, pursuant to Rule 90(2) of the Central Goods and Services Tax Rules, 2017, precludes the respondent authorities from rejecting the refund claim on the grounds of incompleteness, particularly when the entitlement to refund arises from a finalized appeal order? (Question of law and fact, turning on Rule 90(2) of the CGST Rules, 2017). Petitioner's arguments: The petitioner contended that the acknowledgement on Form GST-RFD-02 signifies that the refund application was found to be proper and complete. Therefore, the respondent authorities acted contrary to law by rejecting the claim with remarks about incompleteness, especially since the appeal order directing the refund had attained finality. The petitioner argued they are entitled to the refund of Rs. 15 lacs along with statutory interest. Respondent's arguments: The judgment records no specific arguments from the respondent authorities regarding the rejection of the refund claim, beyond the fact that the rejection order cited non-submission of documentary evidence.