Facts of the Case:

In this case, the petitioner filed a writ petition seeking directions to the respondent authorities to process its GST refund application dated 20.12.2024 claiming a refund of ₹13,84,668/- along with statutory interest under Section 56 of the CGST Act, 2017.

The grievance of the petitioner was that despite filing the refund application, the respondent repeatedly issued multiple deficiency memos dated 13.01.2025, 17.03.2025, 07.05.2025 and 19.07.2025, purportedly under Rule 90(3) of the CGST Rules, 2017, without issuing acknowledgment in Form RFD-02 and without processing the refund on merits.

It was contended that issuance of successive deficiency memos beyond the statutory period of 15 days from the date of filing the refund application was contrary to Rule 90(3) and Circular No.125/44/2019-GST, rendering the deficiency memos illegal and void ab initio. The petitioner relied upon earlier judgments of the same High Court in M/s. Gunnam Infra Projects Pvt. Ltd. v. Union of India and M/s. Durgambika Traders v. Union of India , wherein repeated deficiency memos were deprecated and refund authorities were directed to process refund claims by treating fresh applications as continuation of the original application.

Issue:

Whether repeated issuance of deficiency memos beyond the period prescribed under Rule 90(3) of the CGST Rules, 2017 is legally sustainable, and whether the refund application is liable to be processed along with interest under Section 56 of the CGST Act?

Held that:

The Court took note of its earlier decisions holding that the refund authority is required to scrutinize the refund application within 15 days and either issue acknowledgment in Form RFD-02 or issue one deficiency memo. Repeated issuance of deficiency memos frustrates the refund mechanism and is impermissible. The Court held that the issue raised by the petitioner was squarely covered by its earlier judgments in Gunnam Infra Projects Pvt. Ltd. and Durgambika Traders, wherein refund authorities were restrained from issuing multiple deficiency memos and were directed to process refund applications on merits.

The respondent authority was directed to consider, process and pass appropriate orders on the refund application dated 20.12.2024, including the petitioner’s claim for interest under Section 56, strictly in accordance with law. The Court directed that the refund application shall be processed and disposed of within four months from the date of receipt of a copy of the order.

The Court held that repeated issuance of deficiency memos beyond the statutory period under Rule 90(3) is illegal. Refund authorities must either acknowledge the application or issue a single deficiency memo and proceed to adjudicate the refund claim on merits, including interest under Section 56 of the CGST Act.

Case Name: M/s Amplify Analytix India Private Limited Versus The Assistant Commissioner of Commercial Taxes Lgsto-57, Bangalore dated 09.12.2025

To read the complete judgement 2025 Taxo.online 3513