Refund claim could not be rejected for inadvertent error of opting "export with payment of tax" column in GST returns instead of "export without payment of tax".
In case of Abi Egg Traders v. Assistant Commissioner [W.P. NO. 3773 OF 2020] it is held by the Hon’ble High Court of Madras that refund claim could not be rejected for inadvertent error of opting “export with payment of tax” column in GST returns instead of “export without payment of tax”.
Brief of facts of the case are given hereunder for the purpose of reference:
The petitioner is a sole proprietary engaged in the export of eggs. There is no liability to tax on the export of eggs since the commodity is -nil- rated. Hence, the petitioner was entitled to the Input Tax Credit (in short -ITC-) that had accumulated on the exports.
While filing return for the month of March 18, a mistake had crept in insofar as the petitioner had, instead of opting for exports “without payment of tax”, had opted for the column “with payment of tax”
It may be noted here that, a refund application requires the assessee to stipulate the grounds on which the refund is claimed and the grounds in column 7 are as follows:
| Grounds of Refund Claim (select from drop down) | (a) | Excess balance in Electronic Cash Ledger | ||||||
(b) | Exports of services – with payment of tax | ||||||||
(c) | Exports of goods/services – without payment of tax (accumulated ITC) | ||||||||
ITC accumulated due to inverted tax structure [under clause (ii) of first proviso to Section 54(3)] | |||||||||
(d) | |||||||||
(e) | On account of supplies made to SEZ unit/SEZ developer (with payment of tax) | ||||||||
(f) | On account of supplies made to SEZ unit/SEZ developer (without payment of tax) | ||||||||
(g) | Receipient of deemed export supplies / Supplier of deemed export supplies | ||||||||
(h) | On account of order | ||||||||
Sl.No. | Type of order | Order No. | Order date | Order issuing authority | Payment reference no., if any | ||||
1. | Assessment | ||||||||
2. | Finalization of provisional assessment | ||||||||
3. | Appeal | ||||||||
4. | Any other order (specify) | ||||||||
(i) | Tax paid on an intra-state supply which is subsequently held to be inter-state supply and vice versa (change of POS) | ||||||||
(j) | Excess payment of tax, if any | ||||||||
(k) | Any other (specify) | ||||||||
According to the petitioner what was applicable in the present case is ground 7(b) being ‘export of services – without payment of tax’. However, this ground was unavailable since the refund application, when correlated with the return filed under Section GSTR-3B did not permit the assessee to take a stand contrary to that taken in that return. Thus, the petitioner was constrained to opt for ground (k) being the residuary ground.
GST officer disallowed the refund claim because petitioner had filed refund application under wrong head.
Aggrieved by the order of disallowing the refund, petitioner filed writ petition under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus praying to court to quash the above order as arbitrary and illegal and to direct the respondent to refund the amount.
Hon’ble High Court of Madras has given the view that rejecting the refund solely on the inadvertent error that had transpired would be hypothetical and the conclusion of the officer to this effect is thus set aside.
Original Order can be downloaded below: