GST UPDATE ON DEFICIENCY MEMO FOR REFUND APPLICATION CANNOT BE ISSUED AFTER 15 DAYS.109/2020-21

It is expected from the taxpayers that the deadlines for payment of taxes and returns are strictly adhered to but it is often observed that the timelines for grant of refund is not strictly complied by the department. Recently, a judgement delivered by Hon’ble Delhi High Court in the case of JIAN INTERNATIONAL VS COMMISSIONER OF DELHI GSTshall be of great help to those taxpayers who have filed their refund claims but the same are no being processed within the stipulated time period.
The applicant has applied writ petition before Delhi High Court stating that despite the elapse of the period of fifteen days from the filing of refund application, the officers have neither pointed out any deficiency/discrepancy in FORM GST RFD-03 nor have issued any acknowledgment in FORM GST RFD-02.
The High Court in response has held that if acknowledgement in FORM GST RFD-02 or deficiency memo in RFD-03 has not been issued for the refund claim filed, it shall be presumed that the refund application is complete in all respects in accordance with sub rule (2), (3) and (4) of Rule 89 of CGST Rules. Further, the High Court denied giving opportunity to department to issue deficiency memo as the statutory time period for issuing the same had expired. Moreover, if permission was given to issue deficiency memo, the petitioner would have to file refund claim afresh which would also impair their right to claim interest from the date of filing of the original application for refund claim.
Consequently, it was held that the officers have lost the right to point out deficiency at belated stage and so the court directed the department to sanction the refund along with interest.
There are bonafide instances wherein the refund applications were filed within the prescribed time limits originally but due to error on the part of authorities in issuing deficiency memo within period of 15 days, the assessee is required to suffer. Many times, the time limit for filing refund application after rectifying the defects also gets expired. This Judgement brings relief for many taxpayers whose refund is stuck in the department for a long time. It will also make officersmore compliant and vigilant of their duties and cautious of their actions.
This is solely for educational purpose.
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GST UPDATE ON DEFICIENCY MEMO FOR REFUND APPLICATION CANNOT BE ISSUED AFTER 15 DAYS.109/2020-21

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