M/S Radhemani And Sons ( A Proprietorship Firm) vs. Additional Commissioner (Appeals) CGST And Central Excise

Held

The Court held that the circular dated 25.09.2021, which clarifies the term "subsequently held" in Section 77 of the CGST Act and Section 19 of the IGST Act, is relevant. This circular states that the term "subsequently held" covers both instances where the tax officer makes the determination and where the taxpayer themselves finds the supply to be intra-State or inter-State. Consequently, the Petitioner's contention that a refund is available even when the taxpayer self-identifies the error is supported by this clarificatory circular. The Court found it appropriate to remit the matter back to the appellate authority for a fresh decision in light of this circular. The impugned order was set aside, and the matter was remanded to the appellate authority to decide afresh, without expressing any opinion on the merits of the case. The appellate authority is directed to decide in accordance with law and the circular.

Facts

The Petitioner, M/s Radhemani And Sons, filed a refund claim of Rs. 12,69,255/- for excess IGST paid in February 2018, as per Rule 89(1) of the CGST Rules, 2017. The Deputy Commissioner rejected the refund application via an order dated 23.04.2020, after the Petitioner failed to reply to a show cause notice issued on 31.03.2020. The Petitioner appealed this order to the Additional Commissioner (Appeals), who dismissed the appeal on 25.06.2021. The appellate authority held that refund under Section 77 of the CGST Act and Section 19 of the IGST Act is only available when a supply is subsequently held by an authority as inter-State or intra-State, respectively, and not when the taxpayer self-identifies the error.

Key Issues

1. Whether the refund claim under Section 77 of the CGST Act, 2017 and Section 19 of the IGST Act, 2017 is available when the taxpayer himself subsequently finds an intra-State supply to be inter-State, or vice versa, in addition to when such a finding is made by a tax authority. (Question of law) Petitioner's contention: The Petitioner argued that the term "subsequently held" in Section 77 of the CGST Act and Section 19 of the IGST Act, as clarified by Circular No. 181/01/2022-GST dated 25.09.2021 (referred to as Annexure P-8 in the judgment, though the date provided in the judgment is 25.09.2021), includes situations where the taxpayer themselves identifies the supply as intra-State or inter-State. Therefore, the matter should be remitted for fresh consideration. Respondents' contention: The respondents (Deputy Commissioner and Additional Commissioner (Appeals)) argued, as reflected in the appellate authority's order, that refund under these sections is only applicable when an authority makes the determination, not when the taxpayer self-identifies the error.