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Input Tax Credit Refund can’t be denied for Technical Glitches in GSTN software: Madras HC

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The Madras High court ordered that refund of Input Tax Credit (ITC) cannot be denied for technical glitches in GSTN software.

The Single Judge Bench of Justice G.R.Swaminathan set aside the order rejecting refund claim of CGST and IGST of the assesse wherein, the entire refund liability of Input Tax Credit got auto-populated under a single head of SGST.

The court held that, if the assesse 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.

The order came in while considering the case of petitioner Tvl. Mehar Tex, who is an exporter and has made zero-rated sales in the month of October 2017, November 2017 and February 2018. Accordingly he stated that he was entitled to refund claims of SGST for October, November and also February.

However, the entire claim got consolidated and was figured under the head of SGST alone while uploading refund applications.

The respondent, Assistant Commissioner of GST and Central Excise restricted the claim only under the head of SGST under rule 92 of the Central Goods and Services Tax Rules,2017 and issued notice to show cause the reason why CGST and IGST should not be rejected.

Subsequently, the petitioner responded that the entire refund claim got auto-populated under a single head of SGST. However, the respondent rejected the claims on the ground that no proof was furnished to substantiate the claim.