On the Ground of technical glitches in system refund cannot denied

Facts and issue of the case

The facts of the case , petitioner’s claim for refund of taxes paid under Central Goods and Services Tax as well as State Goods and Services Tax have been refused on the ground that there is no evidence to prove the payment of tax by the petitioner. As per the order of demand of tax and penalty issued under section 129(3) of the State Goods and Services Tax Act, petitioner remitted an amount of Rs.12,26,064/- with the 2nd respondent. Thereafter, petitioner challenged the final orders passed under section 129(3) of the State Goods and Services Tax Act, before the Appellate Authority. By virtue of Ext.P5 order, petitioner was found not liable for payment of any amount of tax and the Appellate Authority quashed the orders issued by the 2nd respondent.

Observation of court

order of the Appellate Authority, petitioner became entitled for refund of the amount deposited under section 129(3) of the State Goods and Services Tax Act, for release of the goods. Pursuant to Ext.P5 order, petitioner filed Ext.P6 application for refund of the amount deposited. In the meantime, the 3rd respondent issued a show-cause notice to the petitioner asking him to show cause why the claim of the petitioner for refund ought not to be rejected on the ground of absence of details of remittance of tax amount, as claimed by the petitioner. It is pursuant to Ext.P8 reply submitted by the petitioner that the impugned communication has been rendered by the 3rd respondent.

Learned Government Pleader, pursuant to instructions, submitted that the reason for rejection, as evident from Ext.P9, is that the amount of tax paid at the first instance was through a temporary account and that since the temporary account is no longer available, the refund cannot be granted through that temporary account. According to the learned Government Pleader, these are all the glitches that are occurring on account of the transition phase of the CGST Act. However it is fairly conceded that the petitioner is entitled for refund of the amount and that the respondents are taking earnest steps to refund the amount without fail in a time bound manner.

In view of the aforesaid submission though I find that the conduct of respondents is not appreciable, still taking into consideration the transition phase of the new statute and the temporary glitches that are occurring as well as the fair submission made by the learned Government Pleader that, the amount shall be refunded, I direct the respondents 2 and 3 to refund the amount of Rs.12,26,064/-, due to the petitioner as refund, within a period of 30 days from the date of receipt of a copy of this judgment. All the technical glitches that may occur in between, shall not stand in the way of ultimate relief of the grant of refund to the petitioner as otherwise the sanctity of the whole scheme of section 129 of the State Goods and Services Tax Act will lose the confidence of the assessees to deposit the amount as contemplated under section 129 of the State Goods and Services Tax Act, will be affected.