The Kerala High Court in the case of MS. JAS NYLONS vs. ASSISTANT STATE TAX OFFICER & ORS. Vide Case No. WP(C) No. 17782 of 2025 dated 23.06.2025, held that where the penalty imposed upon the petitioner under the CGST/SGST Act was set aside in appeal, and refund was claimed but not processed due to technical glitches in the GSTN portal, the petitioner could not be denied refund. The Court permitted the petitioner to file a fresh refund application under the relevant category and directed the authorities to process it promptly. It was further clarified that the petitioner’s right to claim interest on delayed refund would remain open.
Facts of the Case: In this case, during transit of goods, the petitioner’s consignment was intercepted, leading to penalty proceedings under the Act. The proceedings culminated in a penalty order , against which the petitioner filed an appeal before the Joint Commissioner (Appeals) after depositing the entire penalty amount.
The appeal was allowed and the penalty order was set aside. After the appeal, the petitioner attempted to file an online refund application to reclaim the penalty amount paid. However, due to technical errors on the GST portal, the system did not accept the application.
Consequently, the petitioner filed a manual application for refund, which remained unprocessed, prompting the petitioner to approach the High Court.
While the writ petition was pending, during the hearing, the petitioner received a communication from the department clarifying that the APL-04 (i.e. appeal order form) could not be uploaded online due to system limitations, as the disputed tax and interest were shown as “zero” in the APL-01 appeal form. The IT Management Division (ITMD) had acknowledged the glitch. The petitioner was advised to file a fresh refund application under the category: “Refund on account of assessment/provisional assessment/appeal/any other order.”
Issue: Whether the petitioner is entitled to refund of penalty and tax deposited in view of the successful appeal order, despite technical glitches in the GST portal preventing online submission of refund application (APL-04).
Held that:
The Court took note of the communication from the tax department admitting the portal issue and allowing the petitioner to submit a fresh online refund application under the category of refund on account of “assessment/appeal/other order.”
The Court disposed of the writ with directions to process the refund once the online application is filed and reserved the petitioner’s right to claim interest on the refunded amount. The judgment reiterates that technical portal issues cannot override substantive tax rights under the law.
To read the complete judgment 2025 Taxo.online 1322
