The Rajasthan High Court in Medicamen Biotech Limited V. Union Of India[ D.B. Civil Writ Petition No. 2604 of 2023 decided on 10.04.2023], held that a mere irregularity regarding the uploading of physically signed copies of the document cannot be a ground for the rejection of refund claim.
Medicamen Biotech Limited, (hereinafter referred to as “the Petitioner”) filed a refund application form RFD-01, amounting to Rs. 14,34,804/- under the category “supply made to SEZ unit/Developer with payment of Tax” for the period July, 2020, in terms of the provisions of Section 54, sub-section (3)(ii) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”) read with Rule 89(5) of the Central Goods and Services Rules, 2017 (hereinafter referred to as the “CGST Rules”).
The Adjudicating Authority sanctioned refund of an amount of Rs. 14,30,110/- on 14.12.2020 and the same was credited.
The Principal Commissioner, Central Goods and Services Tax, Commissionerate, (hereinafter referred to as the “Competent Authority”) Alwar, on 19.07.2021, reviewed the Order dated 14.12.2020 under Section 107(2) of the CGST Act. The Competent Authority held as per the Master Circular No.125/44/2019-GST dated 18.11.2019 (hereinafter referred to as the “Master Circular”), the refund Order dated 14.12.2020 is not duly physically signed and hence, is not lawful and proper.
The Respondent filed an appeal against the Order dated 14.12.2020 under Section 107 of the CGST Act before the Additional Commissioners (Appeals) CGST, Jaipur (hereinafter referred to as the “Appellate Authority”). The Appellate Authority on 20.09.2022 quashed the order dated 14.12.2020 on the ground that the declarations filed by the Petitioner were not physically signed by the proper person and hence no verification was required and thus, the refund order was not proper (hereinafter referred to as the “Impugned Order”).
Thus, aggrieved by the Impugned Order and in the absence of any tribunal for a second appeal, the Petitioner has filed the present petition.
ISSUES BEFORE THE HIGH COURT
CONTENTIONS OF THE PARTIES
The Petitioner contended that the documents were digitally signed. Moreover, there is no requirement under the law that the documents shall be physically signed before uploading in electronic mode. However, such a requirement has been introduced merely for the purpose of administrative convenience.
It was submitted that there is no dispute regarding the correctness of the documents including undertakings and declarations, therefore the Impugned Order is unsustainable and bad in law.
On the contrary, the Respondents submitted that the Master Circular clearly provides the mandatory requirement that the relevant documents shall be physically signed by the authorized signatory before uploading on the portal.
DECISION AND FINDINGS
The Rajasthan High Court (hereinafter referred to as the “High Court”) observed the findings of the Appellate Authority in the Impugned Order. However, it was noted that all the documents were digitally signed by the authorized signatory and all the relevant documents mandated in the Master Circular issued by the Central Board of Indirect Taxes and Customs (hereinafter referred to as the “CBIC”) were also uploaded by the Petitioner on the portal.
The High Court further observed the provisions of Rules 26 and 89 of the CGST Rules and held that there is no specific requirement of a document to be physically signed even for the authentication purposes of a document. Moreover, the requirement for the physical signature under the Master Circular is for administrative purposes only.
The High Court further held that in case the documents would not have been submitted, it would have resulted in illegality under Rule 26 of the CGST Rules. Thus, the mere absence of a physical signature on the documents is an irregularity and not an illegality.
The High Court observed that the administrative instructions cannot bar the legal requirements. Thus, the Impugned Order rejects the claim of the Petitioner which it is legally entitled, and hence, the Impugned Order is unsustainable in law and set aside the Impugned Order.
Through the present judgment, the High Court primarily observed that the Circulars and Notifications cannot override the legal mandates of the legislation. The provisions of Rule 89 of the CGST Rules nowhere mandate the requirement of a physically signed copy of the documents to be uploaded while filing a claim for a refund.
Moreover, as rightly held by the High Court, the absence of a physical signature in a document can only amount to a mere irregularity and not illegality. Hence, the refund cannot be rejected on a procedural irregularity.
– Team AMLEGALS assisted by Ms. Tisha Sharma (Intern)
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