Facts of the Case

The petitioner, AAPNA INFOTHEEK Pvt. Ltd., had filed an application on 26 September 2019 seeking a refund of IGST amounting to ₹14,84,541 for the period July 2017 to March 2018.

The refund application was sanctioned by the GST authorities through an order dated 01 March 2021. However, while issuing the sanction order, the authorities mistakenly mentioned the refund period as September 2018 to March 2019 instead of the correct period of July 2017 to March 2018.

This clerical error was subsequently noticed by the department. The petitioner thereafter requested the department on 23 March 2022 to correct the incorrect refund period mentioned in the sanction order.

However, the GST department rejected the request for correction vide order dated 18 July 2022, stating that no relevant record was found in the refund register or dispatch register. Aggrieved by this refusal despite the refund already being sanctioned, the petitioner approached the Delhi High Court seeking appropriate relief.

Issues Involved

  1. Whether the GST authorities can deny correction of an apparent clerical error in a refund sanction order.
  2. Whether an already sanctioned IGST refund can be withheld merely because of an incorrect mention of the refund period in the sanction order.
  3. Whether the High Court should direct the department to process and release the refund after completion of necessary formalities.

Petitioner’s Arguments

  • The petitioner submitted that the refund application had been validly filed for the period July 2017 to March 2018.
  • The refund had already been sanctioned by the department.
  • The incorrect period reflected in the sanction order was merely a clerical or typographical mistake committed by the department.
  • The petitioner had promptly requested correction of the error.
  • The refusal to rectify the mistake resulted in unjustified withholding of the sanctioned refund despite there being no dispute regarding eligibility.

Respondent’s Arguments

  • The Revenue informed the Court that it did not intend to file a counter affidavit.
  • The department stated that the refund amount would be remitted to the petitioner after the petitioner furnished the necessary documents and complied with the required formalities.
  • The department acknowledged that payment could be processed subject to completion of procedural requirements.

Court Order / Findings

The Delhi High Court observed that the refund had already been sanctioned and that the Revenue itself had stated before the Court that the refund amount would be released after compliance with necessary formalities.

Accordingly, the Court disposed of the writ petition with a direction to the GST authorities to process the petitioner's request expeditiously and release the refund within four weeks, subject to fulfillment of the requisite formalities by the petitioner.

The matter was also directed to be listed for compliance.

Important Clarification

  • Clerical mistakes in refund sanction orders should not become a ground for indefinitely withholding legitimate GST refunds.
  • Once the department acknowledges the refund entitlement, procedural corrections should be carried out without unnecessary delay.
  • The High Court emphasized expeditious processing where refund eligibility is not in dispute.
  • Administrative errors committed by the department should not prejudice the taxpayer's right to receive sanctioned refunds.

Section Involved

  • Section 54 of the Central Goods and Services Tax Act, 2017
  • IGST Refund Provisions under the GST Law
  • Article 226 of the Constitution of India (Writ Jurisdiction)

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https://mytaxexpert.co.in/uploads/1785561452_2456compressed.pdf   

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