Radhemani and Sons vs Additional Commissioner (Appeals)

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The challenge in this case pertains to an order dated June 25, 2021 (referred to as Annexure P-1) issued by the Additional Commissioner (Appeals), CGST and Central Excise, Raipur (C.G.). This order dismissed the appeal filed by the petitioner, M/s Radhemani And Sons (A Proprietorship Firm), against an earlier order dated April 23, 2020 (referred to as Annexure P-2) passed by the Deputy Commissioner.

The background of the case is as follows: M/s Radhemani And Sons filed a refund claim amounting to Rs. 12,69,255/- under Rule 89 (1) of the Central Goods and Services Tax Rules, 2017 (CGST Rules, 2017). This refund claim was based on an alleged excess payment of IGST in February 2018, as reported in the GSTR 3B Return for the tax period of February 2018. The petitioner submitted this claim on March 18, 2020.

Subsequently, the Deputy Commissioner issued a show cause notice dated March 31, 2020 (referred to as Annexure P-5) in Form GST-RFD-08. The petitioner allegedly failed to respond to this notice. Consequently, the Deputy Commissioner, acting as the Adjudicating Authority, rejected the petitioner’s application through an order dated April 23, 2020 (referred to as Annexure P-2).

This summary encapsulates the essence of the petition’s challenge against the dismissal of their appeal by the Additional Commissioner, focusing on the facts leading to the rejection of the petitioner’s refund claim.

The petition at hand challenges the order dated June 25, 2021 (Annexure P-1) issued by the Additional Commissioner (Appeals), CGST and Central Excise, Raipur (C.G.). This order dismissed the appeal filed by the petitioner against the order dated April 23, 2020 (Annexure P-2) passed by the Deputy Commissioner.

The petitioner, M/s Radhemani And Sons (A Proprietorship Firm), had filed a refund claim of Rs. 12,69,255/- under Rule 89(1) of the Central Goods and Services Tax Rules, 2017, citing “Excess payment of IGST in February 2018 in GSTR 3B Return” for the tax period of February 2018 in RFD-01. The application was submitted on March 18, 2020. Subsequently, the Deputy Commissioner issued a show cause notice dated March 31, 2020 (Annexure P-5) in Form GST-RFD-08 due to the petitioner’s failure to respond. Consequently, the Deputy Commissioner rejected the petitioner’s application under the mentioned provision through an order dated April 23, 2020 (Annexure P-2).

Displeased with the decision of the Adjudicating Authority, the petitioner appealed to the Additional Commissioner (Appeals) CGST and Central Excise, Raipur, in accordance with Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017). The appellate authority, while considering the provisions under Section 77 of the CGST Act, 2017, and Section 19 of the Integrated Goods and Services Tax Act, 2017 (IGST Act, 2017), concluded that a refund would only arise under these provisions if a supply initially considered as intra-State supply is deemed inter-State supply, or vice versa. Therefore, as per the observations, refunds under these provisions do not occur automatically. Consequently, the appeal was rejected, affirming the order of the Adjudicating Authority passed on April 23, 2020 (Annexure P-2).

The challenge in this petition revolves around the order dated 25.06.2021 (Annexure P-1) issued by the Additional Commissioner (Appeals), CGST and Central Excise, Raipur (C.G.). This order dismissed the appeal filed by the Petitioner against the order dated 23.04.2020 (Annexure P-2) passed by the Deputy Commissioner.

The case originated when M/s Radhemani And Sons (A Proprietorship Firm) filed a refund claim of Rs. 12,69,255/- under Rule 89(1) of the Central Goods and Services Tax Rules, 2017. This claim was based on an alleged “Excess payment of IGST in February 2018 in GSTR 3B Return” for the tax period February 2018 in RFD-01. The Petitioner submitted the claim on 18.03.2020. Subsequently, a show cause notice dated 31.03.2020 (Annexure P-5) was issued by the Deputy Commissioner in Form GST-RFD-08, to which the Petitioner failed to respond. Consequently, the Deputy Commissioner rejected the application through an order dated 23.04.2020 (Annexure P-2).

Displeased with this decision, the Petitioner appealed to the Additional Commissioner (Appeals) CGST and Central Excise, Raipur, under Section 107 of the Central Goods and Services Tax Act, 2017 (“CGST Act, 2017”). The appeal was considered in light of the provisions of Section 77 of the CGST Act, 2017, and Section 19 of the Integrated Goods and Services Tax Act, 2017 (“IGST Act, 2017”). The appellate authority observed that a refund under these provisions would only arise if a supply, initially considered as intra-State, is later deemed inter-State, or vice versa. It was held that such refunds do not occur automatically and require a determination by an authority. Consequently, the appeal was rejected, affirming the decision of the Adjudicating Authority.

In response to this, the Petitioner filed the current petition. The Petitioner’s counsel highlighted Circular (Annexure P-8), issued by Respondent No.3 on 25th September 2021, which clarifies the interpretation of the term “subsequently held” as found in Section 77 of the CGST Act, 2017, and Section 19 of the IGST Act, 2017.

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