M/S Chromotolab And Biotech Solutions vs. Union Of INDIA

Held

The Court held that the date of filing the refund application on the common portal, which was 28.12.2018, should be treated as the date of filing the claim for refund for the purpose of satisfying the requirements of Section 54 of the CGST Act and Rule 89 of the CGST Rules. The Court reasoned that the procedure evolved in Circular dated 15.11.2017 cannot operate as a delimiting condition on the applicability of statutory provisions, especially when it is detrimental to the assessee. The Court relied on Supreme Court judgments in Commissioner of Central Excise, Bolpur vs. Ratan Melting & Wire Industries and J.K. Lakshmi Cement Ltd. vs. Commercial Tax Officer, Pali, which held that circulars contrary to statutory provisions or altering them to the detriment of the assessee cannot prevail. The Court also referred to a Division Bench judgment of the same High Court in M/s. Ayana Pharma Ltd. vs. Union of India, which recognized the mode of electronic filing. Consequently, the Court directed the respondents to re-credit the amount of Rs. 3,37,076/- to the petitioner's electronic credit ledger with interest at 9% per annum from 19.11.2019 until realization, to be completed within two weeks.

Facts

The petitioner, M/s Chromotolab and Biotech Solutions, filed a writ petition challenging an order dated 19.11.2019 by the Assistant Commissioner, CGST & Central Excise, which rejected a refund claim of Rs. 3,37,076/-. The rejection was based on the ground that the claim was barred by limitation under Explanation (2)(c)(1) of Section 54 of the CGST Act, 2017. The petitioner had supplied zero-rated goods to SEZ units during August 2017 to October 2017 and filed a refund application on the common portal on 28.12.2018, receiving an ARN. However, the physical submission of the application and documents was made on 17.10.2019. The respondents contended that the actual date of filing was 17.10.2019, making it time-barred, as per a circular dated 15.11.2017.

Key Issues

1. Whether the refund claim filed by the petitioner is barred by limitation under Section 54 of the CGST Act, 2017, considering the electronic filing date versus the physical submission date of the application and documents? 2. Whether Circular dated 15.11.2017, which prescribes a procedure for physical submission of documents, can override the statutory provisions of Section 54 of the CGST Act, 2017, to the detriment of the assessee? Petitioner's arguments: The petitioner argued that the refund application was filed on the common portal on 28.12.2018, and the ARN was generated, which should be considered the date of filing. They contended that the notice issued by the authority was deficient and that the physical submission of documents was made after a considerable delay by the respondents' own mechanism. They relied on the principle that a circular cannot override statutory provisions to the detriment of the assessee. Revenue's arguments: The respondents argued that the petitioner generated an ARN on 20.12.2018 but submitted the printout of the application along with necessary documents to their office on 17.10.2019. They relied on Clause 2.3 of the Circular dated 15.11.2017, which stipulates that the printout of the form along with documentary evidence must be submitted to the jurisdictional proper officer within the time stipulated for filing the refund under the CGST Act. Therefore, the actual date of submission of the complete refund claim was 17.10.2019, making it time-barred.