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2022 (12) TMI 1026 - HC - GSTRefund of unutilised input tax credit - zero rated supplies - non-compliance with the procedure mentioned in para 3.2 of the Circular dated 04.09.2018 by not debiting the amount of IGST of Rs.21,71,74,611/-, which was available in the balance - HELD THAT:- Section 16 of the Act permits registered person to take credit of input tax credit of GST paid on capital goods and input services subject to such conditions and restrictions and in the manner as prescribed in Section 49 of the Act - Rule 89 of the CGST Rules, 2017, deals with application for refund of tax, interest, penalty, fees or any other amount. Sub-Rule (3) of Rule 89 says that "where the application relates to refund of input tax credit, electronic credit ledger shall be debited by the applicant by an amount equal to refund so claimed." It is the uncontroverted fact that petitioner debited the amount equal to the refund claim out of credit of the tax amount lying in its electronic ledger. It is not in dispute that the refund claim application was in accordance with section 54 of the Act and the amount equal to the refund claim was debited from the electronic credit ledger in compliance of Rule 89(4) of the CGST Rules. Therefore, the provisions of law and Rules were complied with by the petitioner. Admittedly, the respondent did not issue any deficiency memo within 15 days as provided in Rule 89(4) of the Rules. Furthermore, the appellate authority had accepted the refund claim of the petitioner on merits and the petitioner's entitlement to refund was not in dispute. When the entitlement of the petitioner for refund is not in dispute and the appellate authority has confirmed the claim of the petitioner and the conditions of section 54(3) of the Act and Rule 89(4) of the Rules are complied with, in such facts and circumstances, even if the procedure laid down in the circular for getting refund stands at variance or if it was not observed by the petitioner for nonculpable reasons, the providence and procedure in the circular would not prevail over the statutory prescription under which the right of the petitioner to get refund is established. Even if the procedure of claiming refund, contemplated in paragraph 3.2 of the Circular could not be adhered to, but on the other hand, there was a substantive right of the petitioner created to claim the refund in law, then non-compliance of the procedure of Circular would only amount to irregularity and not illegality. Petition allowed.
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