Refund Cannot Be Denied for Technical Mistakes in GST Forms – Allahabad
High Court
Background
of the Case
M/s Bharat Mint &
Aroma Chemicals, a registered taxpayer, had filed a refund application claiming
₹12,84,595/- as CGST refund under Section 77(1) of the CGST Act, 2017,
on the ground that tax was wrongly paid as intra-State instead of inter-State
supply.
However, the refund was erroneously
filed under the IGST head, due to what the petitioner called a software
glitch. The department rejected the refund application, and even the
appellate authority refused relief by stating that the claim was wrongly filed
and lacked supporting documents.
Aggrieved by this, the
petitioner approached the High Court, seeking quashing of the orders and a
fresh opportunity to present its claim on merits.
· Bharat
Mint & Aroma Chemicals v. Union of India & Others
·
Court:
High Court of Judicature at Allahabad
·
Case No.:
Writ Tax No. 3189 of 2025
·
Order Date:
01 August 2025
·
Neutral Citation:
2025:AHC:128968
Submissions
by the Petitioner
Counsel: Sri Abhinav
Mehrotra, Ms. Bhavna Mehrotra, and Sri Satya Vrata Mehrotra
The petitioner contended
that:
- The refund application was substantively
correct but filed under the wrong tax head (IGST instead of CGST)
due to a technical/software error.
- The error was not intentional
and should not result in denial of rightful refund.
- The department and appellate
authority ignored the core claim, focusing only on formality and
headings.
- The denial of refund was contrary
to natural justice, as the adverse findings were passed without
opportunity of hearing and were beyond the scope of the original
show cause notice.
Response by
the GST Department
Counsel: Sri Parv
Agarwal
The department argued
that:
- Since the refund application was not filed
under the correct head, the authorities were right in rejecting the
claim.
- Any claim not in proper format
cannot be processed.
Court's
Observations and Findings
The High Court made the
following critical observations:
1. Typographical
or technical errors—such as entering the refund amount under
the wrong head—cannot override substantive rights of a taxpayer.
2. The
application clearly showed that the claim was for CGST refund, and this
was even part of the department's own record.
3. The
appellate authority failed to examine the merits of the claim and rejected
it solely on technical grounds, which was incorrect.
4. Additionally,
the authority introduced a new reason for rejection—lack of documentary
evidence—without including this reason in the original show cause notice,
thus violating the principles of natural justice.
5. The
petitioner was not given an opportunity to respond to the new finding.
Final
Judgment
The Court held:
“Citation of a wrong
provision or typographical error in the forms submitted… cannot be the basis
for rejecting the substantive claims of the petitioner.”
Accordingly:
- The impugned orders dated 29.12.2023
and 03.12.2024 were quashed.
- The matter was remanded back to
the appellate authority for fresh determination on merits, in
light of the Court’s observations.
- The writ petition was allowed
to the extent indicated.
Conclusion
This ruling reinforces
the principle that substance must prevail over form in tax refund claims
under GST. Minor clerical or software errors should not become grounds for denying
legitimate refunds. The judgment also highlights the importance of natural
justice and fair hearing, warning authorities against introducing new
grounds of rejection without notice.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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