The Delhi High Court has held that the Goods and Service Tax (GST) department cannot ignore the refund allowed on zero-rated supply because of an appeal to be filed against the said order.
M/s Netgear Technologies India Private Limited the petitioner prayed to issue direction to the respondent to grant the refund of ₹26,88,280/-, under Order-in-Appeal dated 09.03.2021, along with applicable interest. The petitioner claimed that it had exported services to M/s. Netgear Asia Pte Ltd. without payment of Integrated Goods and Services Tax during the period October 2017 to March 2018.
According to the petitioner, the supplies made were Zero Rated Supply, the petitioner filed a claim for the refund of Input Tax Credit in the prescribed form (Form GST-RFD-01A) claiming a refund of ₹26,88,280/- for the relevant period, along with interest.
The respondent rejected the petitioner’s application for a refund by an Order-in-Original dated. The petitioner appealed the said Order-in-Original before the Appellate Authority [Joint Commissioner (Appeals)] which allowed the appeal.
The petitioner’s request for the claim was not processed and the petitioner filed another application dated 27.04.2021 once again claiming a refund of the said amount. Thereafter the petitioner was informed that the Commissioner had directed the respondent to file an appeal against the Order-in-Appeal.
Harpreet Singh, Counsel for the respondent, submitted that the same was since the Appellate Tribunal has not been constituted. Thus, although the Revenue intends to file an appeal under Section 112 of the Central Goods and Services Tax Act, 2017, it had been unable to do so.
It was evident that the respondent has taken no steps to secure any order about the stay of the Order-in-Appeal under which the petitioner is now entitled to the claim of refund.
The Two Judge bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan viewed that the Revenue cannot ignore the Order-in Appeal and deny the benefits of the same on the ground that it seeks to appeal the said order.
Since the petitioner has been denied the benefit of the order in its favour for over two years, the Court directed the respondent to disburse the petitioner’s claim for refund with applicable interest as expeditiously as possible, within a period of four weeks.
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