Case: Yogesh Rajendra Mehra Vs Principal Commissioner CGST & Central Excise (Bombay High Court) (Writ Petition No. 1632 of 2024)
In another landmark decision the hon’ble court addressed the critical issue of procedural deficiencies in filing appeals against orders regarding the Central Goods & Services Tax (CGST) refunds. This ruling underscore the court’s stance on ensuring that substantive rights are not overshadowed by procedural lapses, especially when appeals are filed within the prescribed period of limitation.
Facts
- The taxpayer had applied for registration under the CGST Act, 2017. Registration Certificate bearing Registration Number: 27AQEPM6029PIZA (old registration) was granted to him on 19th July 2018. The taxpayer had filed his return under the CGST Act on 2nd December 2018 and thereafter, no returns were filed. By an order dated 1st January 2019, the said registration of the taxpayer was cancelled and hence, was rendered inconsequential.
- Subsequently the taxpayer made an application for a fresh registration which came to be granted to the taxpayer on 26th March 2022 with a new registration number: 27AQEPM6029P2Z9 (new registration).
- For the 1st quarter of year 2022, 2 returns came to be filed by his CA who inadvertently, deposited a tax of Rs.1,22,220/- in the cancelled registration number (Old GST Account) being 27AQEPM6029PIZA, as also under the new registration number being 27AQEPM6029P2Z9, when in fact, the returns were required to be filed and tax was to be deposited only under the new registration account.
- The taxpayer approached the department with an application claiming refund of Rs.1,22,220/-, being tax deposited by mistake in the returns under the cancelled registration number.
- The Assistant Commissioner, CGST & C.Ex., by his order dated 8th June 2022, rejected the refund application on the grounds that the taxpayer did not file any GSTR 1 /GSTR 3B return after December 2018. Further, he reasoned that as per Para (6) of Circular No. 125/44/2019 dated 18.11.2019, any refund claim can be filed only after furnishing all the returns which are due to be furnished on or before the date of refund application.
- Being aggrieved by the order passed by the Asst. Commissioner, the taxpayer approached the appellate authority, under the provisions of Sec 107 of the CGST Act. By the impugned order (Order in appeal) dated 28th Dec 2022, the taxpayer’s appeal was rejected on the ground of limitation.
- The taxpayer submitted through his counsel that the returns as filed under the old registration were void ab initio and consequently, the amount deposited thereunder was of no legal consequence, so as to amount to be any tax either validly paid or collected. It is submitted that these facts were not taken into consideration by the authorities below, in passing the impugned orders. It is hence submitted that the said orders are contrary to law.
- Further he submits that that, although there was an error in submitting copies of some of the documents, that cannot make the filing of the appeal to be invalid and/or not within the limitation when according to him, the same was filed within the prescribed limitation as prescribed by Sections 107(1) and (4) of the CGST Act.
Held
- The approach of both the Authorities in dealing with the taxpayer’s refund application is not correct in facts as also in law.
- That there was an inadvertent / bona fide mistake, on the part of the taxpayer’s CA in filing the return for the 1st quarter of the year 2022 on both the registrations instead of filing such returns under the new / second registration.
- Observed that it was required to be considered by the authorities that an assessee cannot be expected to file his return and deposit any tax under an invalid cancelled registration number.
- Insofar as the tax deposited under the first (cancelled) registration is concerned, the said registration itself being non-existent, the tax return filed thereunder and any tax deposited under such return, could not have been retained by the respondents as it was not a deposit as per law, it also cannot be a deposit received or any collection of tax under authority of law.
- Further it was observed that any deficiency in filing the appeal / application like failure to file physical documents, cannot make the appeal, which was registered on the online portal within the prescribed period of limitation, to be labelled and/or held to be barred by limitation. Once the appeal was filed (albeit under the Online method) within the prescribed limitation, any deficiency in the appeal certainly could be removed later on, as the law does not provide, that the proceeding be strictly filed sans deficiency, and only then, the proceedings would be held to be validly filed.
- Any procedural deficiency in the proceeding filed within the prescribed limitation cannot be labelled to be a proceeding filed beyond limitation.
- The impugned order quashed; the taxpayer is entitled to refund of the amount deposited erroneously under the cancelled registration number along with the applicable interest thereon.