Facts of the case:

1. The Assessee has filed the refund application under the category of Supply made to SEZ unit/Developer with payment of tax and subsequently, the Assistant Commissioner sanctioned refund vide order dated 14.12.2020.
2. Thereafter, competent authority i.e., Principal Commissioner observed that the refund granted to the Assessee was improper as the documents were not duly signed as per master circular no. 125/44/2019 dated 18.11.2019 but were digitally signed by the assessee.
3. The department filed an appeal u/s 107 before the Appellate Authority on the ground that the adjudicating authority has wrongly sanctioned the refund claim of the Assessee. Thereafter, the Appellate Authority allow the appeal of the department and quashed the refund sanction order, and held that the declaration filed by the assessee was not physically signed.

“Further, I find that the respondent in their cross reply admitted that, scanned copied of few more Declaration and undertakings were uploaded as attachments with FORM GST RFD-01 submitted electronically through the common portal, but by oversight these Declaration and undertakings were not physically signed before scanning and attaching with FORM GST RFD—1……”

4. Aggrieved by the order of the Appellate Authority, the assessee filed this present writ before the Rajasthan High Court

Ruling:

Hon’ble High Court observed that there is no requirement for a physical signature on the documents which is required to be uploaded on the GST Portal in terms of Rule 89 and Rule 26 of the CGST Rules, 2017.

Further, it has been held that if the declaration is digitally authenticated in the matter prescribed under Rule 26 of the CGST Rules, 2017, then non-submission of physically signed and scanned declaration may only be an irregularity but not an illegality. Hence, the order rejecting refund claim passed by the Appellate authority is not sustainable as per law.

Accordingly, the Hon’ble High Court set aside the order passed the Appellate Authority and confirm the order passed by the Assistant Commissioner stands revived and will ensure the benefit of the petitioner to claim its refund.

MyGST Refund Comments:

Refund cannot be rejected in case the taxpayer fulfilled all its legal requirements. Further, it is not mandatory to upload a physically signed scanned copy of the document under Rule 89(2)(f) of the CGST Rules 2017.

The relevant extract has been iterated below for ease of reference-

Rule 89 of the CGST Rule, 2017 – Application of refund of tax, interest, penalty, fees or any other amount-

• Any person, except the persons covered under notification issued under section 55 claiming refund of 13 [any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49 or] any tax, interest, penalty, fees or any other amount paid by him, other than refund of integrated tax paid on goods exported out of India, may file electronic cash ledger in accordance with the provisions of sub-section (6) of section 49 or 10 [subject to the provisions of rule 10B,] an application electronically in FORM GST RFD-01 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner
• The application under sub-rule (1) shall be accompanied by any of the following documentary evidences in Annexure 1 in FORM GST RFD-01 , as applicable, to establish that a refund is due to the applicant, namely:-
  • ———–
  • ———
  • ———-
  • ———-
  • ———–
  • a declaration to the effect that tax has not been collected from the Special Economic Zone unit or the Special Economic Zone developer, in a case where the refund is on account of supply of goods or services or both made to a Special Economic Zone unit or a Special Economic Zone developer;]

   Rule 26 of the CGST Rule, 2017 – Method of Authentication

  “All applications, including reply, if any, to the notices, returns including the details of outward and inward supplies, appeals or any other document required to be submitted under the provisions of these rules shall be so submitted electronically with digital signature certificate or through e-signature as specified under the provisions of the Information Technology Act, 2000 (21 of 2000) or verified by any other mode of signature or verification as notified by the Board in this behalf”

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