ITC Refund cannot be denied for Technical Glitches in GSTN Software, says Madras HC

The Petitioner, Tvl. Mehar Tex is an exporter and has made zero-rated sales during the months of October 2017, November 2017, and February 2018. Accordingly, Petitioner stated that he is entitled to refund claims of SGST for the October month, CGST for the November month, and CGST, SGST, and IGST for the February month. However, when the refund applications were uploaded, the entire claim got consolidated and figured under the head SGST alone.

While considering the refund applications, the Respondent, the Assistant Commissioner of GST and Central Excise restricted the refund claim to the extent of the Petitioner’s liability for the respective months only under the head of SGST under Rule 92 of the Central Goods and Services Tax Rules, 2017 and issued notice to show cause as to why refund of CGST and IGST should not be rejected.

The judge set aside the order rejecting refund claims of CGST and IGST of the assessee wherein, the entire refund liability of ITC got auto-populated under a single head i.e. State Goods and Services Tax instead of SGST, CGST, and IGST. 

The court held that, if the assessee was otherwise eligible to refund, the refund claim ought not to be denied on the ground of technical glitches and error occurred due to auto-population in Goods and Service Tax Network software. Nothing can be more unfair.