Non-Release of Sanctioned Refund in ECL due to Technical Glitches in GST Portal: Andhra Pradesh HC directs to Pay Interest after Re-Consideration [Read Order]

While considering a petition challenging an endorsement by GST department rejecting the already sanctioned GST refund not released due to technical glitches on the GST portal, the Andhra Pradesh High Court has directed the department to re-consider the claim and pay interest if the assessee is eligible.

The Petitioner, RK Infracorp Pvt Ltd, has availed Input Tax Credit and adjusted the same against an output liability in its monthly returns. It is further stated that, in addition to the amount available as Input Tax Credit, the Petitioner also has credit of TDS by the contractees under Section 51 of CGST Act/ SGST Act @ 2%. The amount is said to be lying as excess credit to the Petitioner in the Electronic Cash Ledger and it does not get adjusted against the output liability, in view of the excess amount lying in the Electronic Credit Ledger. It is said that the amount credited in the form of TDS is eligible to be refunded to the Petitioner under Section 54(1) of the CGST Act. As the excess amount was lying, in the Electronic Cash Ledger, the Petitioner filed three [03] separate applications for refund of excess credit lying in Electronic Cash Ledger. After waiting for a long period, when the petitioner approached the department, it was observed that there was no response from the Petitioner for the notice issued in RFD-08 and the refund was nt processed due to glitches in the portal.

The petitioner contended that, the provisions of Section 54(3)(4) of SGST Act, do not apply to the case on hand, as it relates to excess input credit and that the case of the Petitioner falls under Section 54(1) of Act.

Allowing the petitions, Justice C.Praveen Kumar and Justice A.V. Ravindra Babu remanded the matters back to the Assistant Commissioner [State Tax] to deal with the same afresh after accepting the applications filed by the Petitioner in the month of January 2020, for refund of excess balance in the Electronic Cash Ledger, in accordance with law, by giving an opportunity of hearing to the Petitioner, preferably within a period of six [06] weeks from the date of receipt of the Order.

“It is needless to mention that, three [03] applications made by the Petitioner on 24.01.2020 vide ARN/RFN Nos.AA3701200188994, AA370120021735P and AA3701200211731, be treated as applications for refund made in the year 2020 itself and if it is found that the Petitioner is eligible for refund of excess credit in the Electronic Cash Ledger, the said amount shall be paid to the accounts of the Petitioner along with interest as prescribed under law,” the Court said.

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