The Hon’ble High Court of Andhra Pradesh vide its order dated 09.12.2022 in the matter of M/s Varshan Enterprises Vs. Office Of The GST Council in Writ Petition No. 10637 of 2021, held that the petitioner cannot be compelled to follow a circular for claiming refund, which debarred the petitioner for manual filing and practically impossible to be followed or performed.

The Petitioner filed the writ petition before the Hon’ble High Court praying for setting aside the communication of Superintendent of CGST, Bheemavaram Range vide his Reference No: OC No:-151/2021 dated 26.02.2021 and directing the Respondent No:- 1 & the Respondent No:- 2 to permit the Petitioner to rectify the details of the recipient of the services in the form GSTR – 1 for the quarter ending on 30-6-2018 to enable M/s. Vodafone Mobile Services Ltd., Kondla Koya, Telangana State, to claim the credit of IGST of Rs. 7,87,328=78 or to the petitioner which is paid on the transactions which are not actually conducted.

Facts of the Case: –

• That the petitioner is a taxable person under the CGST Act, 2017 & The APGST Act, 2017 and has been allotted with Goods and Services Tax Identification Number (GSTIN) 37AAPV7646A1ZT, and comes under the Bhimavaram Central GST Range headed by the Superintendent of Central Goods and Services Tax.
• Further, the petitioner is filing the common returns and details of outward supplies regularly both under APGST Act & CGST Act, 2017, electronically through the common portal duly reporting the intra-state supplies of goods and services as mandated and also inter-state supply of goods and services under the IGST Act since July, 2017.
• The petitioner is engaged in business of supplying telecom pipe laying services in the State of Telangana like M/s.Vodafone Mobile Services Limited, Kandlakoya Village, Medchal Mandal of Telangana State, whose another office is located at Mumbai. The petitioner supplied the cable laying services at Kandlakoya of Telangana State.
• However, the petitioner erroneously issued two tax invoices covering the said supply of cable laying services to M/s.Vodafone Mobile Services Limited, Mumbai and two other tax invoices in the month of June, 2018 declaring the IGST liability and also issued a credit note No.10 for total value of Rs.3,11,619=12 (with IGST Rs.47,535=12) reducing the original supply consideration charged in the said two tax invoices issued by them to M/s.Vodafone Mobile Services Limited, Mumbai for the tax period June, 2018. The tax invoices issued in March, 2018 are returned in Form GSTR 3B for the tax period of April, 2018 and the petitioner furnished details of such invoices in Form GSTR-1 for June, 2018 and they are returned in both Form GSTR-1 for the quarter ending 30.06.2018.
• Thereafter, the petitioner after entering the said details and returns information in the GST common portal, the GSTIN of M/s.Vodafone Mobile Services Limited, Mumbai i.e., 27AAACS4457Q1ZQ inadvertently entered in instead of the GSTIN of M/s.Vodafone Mobile Services Limited, Kandlakoya, Medchal Mandal, Rangareddy District, Telangana, which is purely an inadvertent mistake committed in the tax periods of GST regime.
• Further, due to this human error, the actual recipient of cable laying services from the petitioner at Telangana is not able to claim the credit of the IGST paid by the petitioner. After realising this mistake, the petitioner tried to rectify this mistake in May, 2020 but in vain. The GST common portal is not permitting the same, because the time available for rectification of such mistake is only up to 20.10.2019. The petitioner realized this mistake in May, 2020 when M/s.Vodafone Mobile Services Limited, Kandlakoya, refused to pay the GST amount by correspondingly reducing the subsequent supply consideration payable by it.

Petitioner’s submissions: –

• It was submitted on the behalf of the petitioner that there is no dispute that a human error was committed in keying the GST common portal. Though, the petitioner could realize the mistake only in May, 2020 and thereafter, made several attempts to rectify the mistake but in vain as the GST common portal did not allow for such rectification.
• Thereafter, when the petitioner filed a letter dated 17.02.2021, raising various contentions, it was asked to follow the Circular dated 18.11.2019 by Respondent No. 2. The said circular is impracticable for the petitioner to follow as the GST common portal is not permitting such rectification.
• That the real recipient of service of goods is M/s.Vodafone Mobile Services Limited, Kandlakoya, Telangana but not M/s.Vodafone Mobile Services Limited, Mumbai, and in view of r Article 265 of the Constitution of India, no tax shall be levied or collected except by authority of law. Under Section 72 of the Indian Contract Act, 1872, a person to whom money has been paid or anything delivered by mistake or under coercion imposed, shall repay or return it. Therefore, the amounts that were mistakenly paid, as above, cannot be taken as the amount payable legally to the respondents.
• It was further contended that Circular dated 18.11.2019 of Central Board of Indirect Taxes, with effect from 26.09.2019, permitted certain types of refunds through electronic mode only, which are listed in Para No.3 from (a) to (l) and the claim of the petitioner would not come under the said purview.
• It was submitted that Rule 97(A) of the CGST Rules, 2017 provides for manual filing of refund and thus, the respondents had no authority to restrict the filing of refunds through electronic mode only, and if it is allowed by the respondents, the petitioner would have been in a position to submit his claim manually successfully.
• So, the inability of the petitioner to file the refund claim online, does not enable the respondents to contend that the claim of the petitioner is barred by limitation. Moreover, the amounts that are paid by the petitioner cannot be brought under the purview of the tax legally paid and the amount was remitted on account of a human error, as such the procedure under Section 54 of the CGST Act has no application.  Even otherwise, the petitioner was prevented from rectifying the mistake, as the above Circular did not permit manual filing under Rule 97A of the CGST Rules
• To support its contentions, reliance was placed on the decision of the Madras High Court in Pentacle Plant Machineries Private Limited v. Office of the GST Council, New Delhi and others MANU/TN/1556/2021, Bombay High Court decision in Commissioner of CGST & Central Excise v. Shriram Transport Finance Company Limited MANU/MH/0373/2021 and Laxmi Organic Industries Limited v. Union of India and others WP No.7861/2021, Dt.30.11.2021, a decision of the Hon’ble Apex Court in Mafatlal Industries (first supra), a decision of the High Court of Telangana in Vasudha Bommireddy, Hyderabad and another v. Assistant Commissioner of Service Tax, Hyderabad and a decision of High Court of Gujarat in M/s. Cosmol Energy Private Limited v. State of Gujarat.

Respondents’ submissions: –

• It was submitted on the behalf of the respondents that it is the duty of the petitioner to follow the procedure as contemplated in the Circular of the year 2019 and his claim falls under Section 54 of the CGST Act, which prescribe the period of limitation of two years and the petitioners claim is barred by limitation.
• Relying on the decision of Hon’ble Supreme Court decision in Union of India and others v. VKC Footsteps India Private Limited (2022) 2 SCC 603, it was submitted that various case laws referred by the petitioner are not applicable to the fact of the case.
• It was submitted that GST refund claims are governed by Section 54(1) of CGST Act and 89(2) of the Central Goods and Services Tax Rules, 2017. That in view of Circular dated 18.11.2019 of Central Board of Indirect Taxes and Customs, the contention raised on the behalf of the petitioner that limitation as specified in Section 54(1) of the CGST Act is of no application and that limitation is to be governed under Section 17(1)(c) of the Limitation Act, 1963 has no merit.  The decision of Hon’ble Supreme Court in Mafatlal Industries Limited, referred by the petitioner is not applicable to the present case.  Therefore, the writ petition is liable to be dismissed.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found that in the present matter, the point which arises for consideration is, the the directions and relief as sought by the petitioner can be granted or not.
• The Hon’ble Court found that there is no dispute that the real recipient of the goods that are supplied by the petitioner is M/s.Vodafone Mobile Services Limited, Kandlakoya Village, Medchal Mandal, Telangana with specific GSTIN number. Further the admitted facts are regarding the invoices that were generated in March, 2018 and two other invoices that were generated in June, 2018 and the credit note bearing No.10, while uploading the details and returns information in the GST common portal, the GSTIN of M/s.Vodafone Mobile Services Limited, Mumbai was entered in instead of GSTIN of M/s.Vodafone Mobile Services Limited, Kandlakoya, Telangana.
• That in view of Section 54 of CGST Act, any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. Though, it is the contention of the petitioner that the error came to the knowledge in May, 2020 and when they made an attempt to rectify it, GST Portal is not allowing to do so. Subsequently, the petitioner filed a letter dated 17.02.2021 with the respondents, in reply to which, it was directed to follow the Circular of 2019.
• Therefore, the grievance of the petitioner is that it is very difficult to follow the said Circular as the GST portal did not permit to rectify the defects. When the letter of the petitioner was so elaborate, respondents simply issued a reply directing the petitioner to follow the Circular of the year 2019.
• Thereafter, the Hon’ble Court after perusal of rule 97A of the CGST rules, 2017 & the Circular dated 18.11.2019, found that the claim of the petitioner would not come under para No. 3 of the Circular. Further, when the rule 97A permits for manual filing, it is not known why the filing was restricted to electronically in the said Circular.  That due to this restriction the petitioner could not file its refund claim, when the error came to notice in May 2020.
• From the perusal of rule 97A & the Circular dated 18.11.2019, it was observed by the Hon’ble High Court that the respondents are compelling the petitioner to follow the Circular which is virtually impracticable to follow.
• Thereafter, the Hon’ble Court taking note of decisions relied upon by the petitioners in Pentacle Plant Machineries (second supra), Commissioner of CGST & Central Excise (third supra), Mafatlal Industries Limited (first supra), Vasudha Bommireddy, Hyderabad (fifth supra), M/s. Comsol Energy Private Limited (sixth supra), n Laxmi Organic Industries Limited v. Union of India and others WP No.7861/2021, Dt.30.11.2021 HC Bombay, found that admittedly, Rule 97A of the CGST Rules also permits manual filing restriction in Circular, dated 18.11.2019, seeking refund by electronic mode only may not be proper.
• That in the light of principles stated in the above decisions, the amounts that were paid by the petitioner furnishing the incorrect details cannot be taken as a tax due to the respondents, legally. Further, it cannot be claimed by the respondents that the refund claim of the petitioner is barred by limitation.
• It was further found by the Hon’ble Court that in light of the of the constitutional bench decision of the Hon’ble Apex Court in Mafatlal Industries (first supra), one cannot enrich themselves under Section 72 of the Contract Act and they are bound to return the amounts which were paid wrongfully. Therefore, the contention raised on the behalf of the respondents that in view of the decision of Hon’ble Supreme Court in VKC Footsteps India Private Limited (seventh supra), the claim of the petitioner is barred by limitation is not tenable.
• It was found that it is very clear that the petitioner cannot be compelled to follow the Circular of the year 2019, which debarred the petitioner from manual filing. The petitioner cannot be compelled to do certain things which are impossible to be performed.
• It was found that the respondents cannot retain the disputed amount, that are paid to them, due to inadvertent error while keying the name of M/s.Vodafone Mobile Services Limited, Kandlakoya village, Medchal Mandal, Telangana State. The contention raised by the respondents that the claim of the petitioner is barred by limitation is not acceptable.  Therefore, the petitioner is entitled to relief.

The Hon’ble Court with the above findings, allowed the writ petition by setting aside the communication of the Superintendent of Central GST, Bhimavaram Range vide his Reference in OC No.151/2021, dated 26.02.2021.  The Petitioner was directed to make an application in manual form for refund of the amount to which he is entitled to and the respondents are directed to pass orders in accordance with law, within a period of four weeks thereafter.