the essay of 19 July 2023 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"
"http://www.w3.org/TR/html4/loose.dtd">
<html>
<head>
<title>Untitled Document</title>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1">
</head>
<body bgcolor="#FFFFFF">
<p align="justify"><font color="663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JULY 19, 2023</strong></font></p>
<p align="center"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Ordeal of getting a refund</strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u>By Vijay Kumar </u></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is easier for a camel to pass through the eye of a needle than for a taxpayer to get refund from a revenue officer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Somehow the officers use all their brilliance to find some reason to deny refunds. They forget that their job is to collect the correct revenue - not a rupee less, not a rupee more. If they have collected a rupee more, they should be as eager to return/refund it as they were at the time of collecting it. The ingenuity of the departmental officers knows no bounds when it comes to rejecting refunds. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not as if these rejecters of refunds are champions of revenue or they are serving the cause of revenue. These officers are ultimately responsible for the government ending up with payment of interest for a long period, because some Assistant Commissioner wanted to show that he was more loyal than the king and the refund is granted only after the assessee successfully completes a tortuous voyage through the treacherous and uncertain waters of taxation and sometimes the process has to be repeated as the following case will show. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I asked a senior Indirect Tax Officer, why they are allergic to granting refunds. He said, "at the end of the day, we are revenue officers; our job is to collect tax, not to refund it." When I asked him as to why Income Tax Department is more liberal in granting refunds than the CBIC officers, he said, "perhaps their refund orders are not reviewed by senior officers." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Look at this story: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A taxpayer claimed refund of Input Tax Credit (ITC), in respect of certain exports, (in Form GST RFD-01) on 20.04.2022. On 19.05.2022, the GST Authority issued a Show Cause Notice proposing denial of refund claimed by the taxpayer, on several grounds.The taxpayer sought time to respond to the said Show Cause Notice. The GST Authority rejected the taxpayer's claim in terms of Orders-in-Original dated 17.06.2022. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The taxpayer appealed against the said orders before the appellate authority.The appeals were disposed of by Orders-in-Appeal dated 31.01.2023. The appellate authority partly allowed the taxpayer's claim for refund to the extent of Rs. 7,45,296/- instead of Rs. 7,76,936/- as claimed for the period, January, 2021 to March, 2021 and further allowed the claim to the extent of Rs. 9,74,094/- instead of Rs. 9,96,576/- as claimed, for the period, April, 2021 to September, 2021. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He won the appeal, but did he get refund? What? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The taxpayer had, once again, filed the claim for refund on the basis of the Orders-in-Appeal dated 31.01.2023. According to the GST Authority, the said application was deficient as it was not accompanied by an undertaking to the effect that the petitioner would refund the sanctioned amount along with interest in case it is found that the requirements of Section 16(2)(c) of the CGST Act read with Section 42(2) of the CGST Act, were not complied with in respect of the amount refunded. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is important to note that the deficiency memo did not specifically indicate the said deficiency. It merely stated that "supporting documents attached are incomplete". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The frustrated taxpayer approached the Delhi Court with a writ petition. <a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTc2OTY3"><strong>2023-TIOL-813-HC-DEL-GST</strong></a></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the High Court, the Counsel appearing for the GST stated that, notwithstanding, that the petitioner had prevailed in its appeal, it was required to submit an online request. He submitted that in terms of the circular dated 03.10.2019, a person prevailing in its claim for refund in appeal or in any other forum, is required to file a fresh application in form GST RFD-01.He further submited that the said form is, once again, required to be accompanied by all relevant documents including undertaking and declaration. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Circular dated 03.10.2019 states, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Doubts have been raised on the procedure to be followed by a registered person to claim refund subsequent to a favourable order in appeal or any other forum against rejection of a refund claim in FORM GST RFD-06. The matter has been examined and in order to clarify this issue and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 hereby clarifies the issues raised as below: </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>2. xxx </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>3. In case a favourable order is received by a registered person in appeal or in any other forum in respect of a refund claim rejected through issuance of an order in FORM GST RFD-06, the registered person would file a fresh refund application under the category "Refund on account of assessment/provisional assessment/appeal/any other order" claiming refund of the amount allowed in appeal or any other forum. Since the amount debited, if any, at the time of filing of the refund application was not re-credited, the registered person shall not be required to debit the said amount again from his electronic credit ledger at the time of filing of the fresh refund application under the category "Refund on account of assessment/provisional assessment/appeal/any other order". The registered person shall be required to give details of the type of the Order (appeal/any other order), Order No., Order date and the Order Issuing Authority. The registered person would also be required to upload a copy of the order of the Appellate or other authority, copy of the refund rejection order in FORM GST RFD 06 issued by the proper officer or such other order against which appeal has been preferred and other related documents. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>4. Upon receipt of the application for refund under the category "Refund on account of assessment/provisional assessment/appeal/any other order" the proper officer would sanction the amount of refund as allowed in appeal or in subsequent forum which was originally rejected and shall make an order in FORM GST RFD 06 and issue payment order in FORM GST RFD 05 accordingly. The proper officer disposing the application for refund under the category "Refund on account of assessment/provisional assessment/appeal/any other order" shall also ensure re-credit of any amount which remains rejected in the order of the appellate (or any other authority). </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the High Court observed, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We are of the view that the petitioner was not required to make repeated applications for refund after it had prevailed in its appeals before the appellate authority. The appellate proceedings are a continuation of the petitioner's applications for refund and, therefore, the Orders-in-Appeals were required to be implemented. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We are unable to accept that it is open for the respondent to raise any deficiency memo after a taxpayer has succeeded in appellate proceedings. Undisputedly, the petitioner had filed its application in the requisite form (GST RFD-01) along with the necessary declarations and undertaking. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The respondent had examined the said refund and had denied the same on certain grounds, which were subject matter of appellate proceedings. After the petitioner had succeeded in its appellate proceedings, there is no question of the respondent now raising any deficiency or once again requiring the petitioner to furnish any undertaking or declaration which it had already done at the initial stage. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We are unable to accept that a taxpayer is required to make repeated applications for seeking a refund. Once a taxpayer has made a claim for refund, the same is required to be processed in accordance with law. If the refund is rejected for any reason and the said party prevails before the appellate authority, it is not open for the respondents to desist from processing the claims on any such technical grounds. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif"style="background-color:#C1DFE8" span="span"><em>The circular dated 03.10.2019 sets out a convenient procedure for moving the concerned authorities and must be construed as such. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Thus, a taxpayer may file a fresh online application to trigger the processing of its refund, however, it is not open for the respondents to raise further deficiency memos regarding the same. </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court added, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We are also unable to accept that the petitioner's refund can be withheld merely on the ground that the respondent proposes to review the Orders-in-Appeal dated 31.01.2023. </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court allowed the petition and directed the GST Authorities to forthwith sanction the refund along with applicable interest in accordance with the provisions of the CGST Act.</font></p>
<div align="center">
<table width="90%" border="0" cellspacing="0" bgcolor="#FF3300">
<tr>
<td><strong><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif">Imagine a situation:</font></strong></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The taxpayer has won his appeal against rejection of his refund claim. The next day (or week), he gets a call from his jurisdictional GST Assistant Commissioner congratulating him and informing him that the refund amount is transferred to his account and that in case of any difficulty, he is free to call the GST Officer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will this ever happen? </font></p>
<p align="justify"><strong><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Next week</font></strong></p>
</body>
</html>