GSTN Advisory, Dated 30-01-2026

The Goods and Services Tax Network (GSTN) has issued an advisory announcing system enhancements in the filing of GSTR-3B, applicable from the January-2026 tax period onwards. The changes primarily relate to interest computation, auto-population of tax liability, and flexibility in ITC utilisation, in line with the CGST Rules.

1. Revised Interest Computation in Table 5.1

GSTN has updated the interest calculation mechanism in Table 5.1 of GSTR-3B to extend the benefit of the minimum cash balance available in the Electronic Cash Ledger. This benefit will be considered from the due date of return filing up to the actual date of tax payment, in accordance with the proviso to Rule 88B(1) of the CGST Rules.

For delayed filing of GSTR-3B for the January-2026 tax period, the applicable interest will be system-computed and auto-populated in the February-2026 GSTR-3B.

2. System-Computed Interest – Minimum Payable Amount

The interest amount computed by the portal will be non-editable downward and will represent the minimum interest payable. However, taxpayers will have the option to revise the interest amount upward, where required, based on self-assessment and factual considerations.

3. Auto-Population of Tax Liability Break-up Table

The GST portal will now auto-populate the Tax Liability Break-up Table in GSTR-3B based on document dates declared in GSTR-1, GSTR-1A, or the Invoice Furnishing Facility (IFF). This enhancement applies to cases where the underlying supply relates to earlier tax periods but the tax liability is discharged in the current period, improving consistency between outward supply reporting and tax payment.

4. Flexibility in Utilisation of ITC for IGST Liability

Once the available IGST Input Tax Credit (ITC) is fully exhausted, the system will permit taxpayers to discharge IGST liability using available CGST and SGST ITC in any order. This provides enhanced flexibility in credit utilisation and aligns the portal functionality with statutory provisions.

5. Interest Recovery for Cancelled Taxpayers

In cases involving cancelled registrations, where the last applicable GSTR-3B is filed after the due date, the applicable interest will be levied and recovered through GSTR-10, ensuring proper recovery of dues post-cancellation.

6. Compliance Implications

These enhancements reinforce GSTN’s focus on automation, rule-based interest computation, and improved return accuracy. Taxpayers should review their return filing timelines, cash ledger balances, and ITC utilisation strategies to ensure alignment with the revised system functionality effective from January 2026.

Click Here To Read The Full Update 

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Circular no. HO/38/13/(3)2026-MIRSD-POD/I/3763/2026; Dated: 30.01.2026

The Securities and Exchange Board of India (SEBI) has simplified the process for issuance and transfer of securities by dispensing with the requirement of issuing a Letter of Confirmation (LoC). Going forward, securities may be credited directly to investors’ demat accounts, reducing procedural steps and timelines.

1. Direct Credit of Securities to Demat Accounts

Under the revised framework, the Registrar and Transfer Agent (RTA) or the Issuer Company is required to verify and process investor service requests and issue securities directly in dematerialised form to the demat account of the securities holder or claimant.
Such direct credit must be completed within 30 days from the date of receipt of a valid service request.

2. Documentation Requirement – Client Master List (CML)

Investor service requests must be accompanied by a copy of the latest Client Master List (CML) of the demat account. The CML:

• must not be older than two months, and
• must be duly attested by the Depository Participant (DP).

This requirement ensures accuracy of demat account details prior to credit of securities.

3. Initiation of Demat Conversion Request

After verifying and processing the service request and supporting documents, the RTA or Issuer Company must initiate the dematerialisation (demat conversion) request in the depository system. This step enables the direct credit of securities into the demat account of the securities holder or claimant.

4. Intimation on Successful Dematerialisation

Upon confirmation of the demat conversion request, the depositories, RTAs, or listed companies, as applicable, are required to send an intimation to the securities holder or claimant confirming the successful dematerialisation and credit of securities to the demat account.

5. Effective Date

The circular will come into force with effect from April 2, 2026. All RTAs, issuer companies, depositories, and investors must align their processes with the revised requirements from this date.

6. Key Takeaway

By eliminating the Letter of Confirmation and enabling direct demat credit, SEBI aims to simplify investor servicing, reduce turnaround time, and enhance operational efficiency, while maintaining necessary checks through attested demat account verification.

Click Here To Read The Full Circular

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Case Details: Jagbeer Singh vs. State of U.P. - [2025] 181 taxmann.com 893 (HC-Allahabad)

Judiciary and Counsel Details

• J.J. Munir, J.
• Ashwini Kumar Srivastava, Adv. for the Petitioner.
• Girijesh Kumar Tripathi, Addl. Chief Standing Counsel for the Respondent.

Facts of the Case

In the instant case, the petitioner was appointed as an unskilled labourer in the Irrigation Workshop Division, Meerut, in April 1983. He was issued a retirement notice stating that he would retire upon reaching 60 years of age.

The petitioner represented that his date of birth was 20.02.1967, relying on a Class VIII school-leaving certificate, a high-school marksheet, and an internal certificate issued by Mukhya Samaypal reflecting a date of birth of 20.02.1967, a date of appointment in April 1983, and a projected retirement in March 2025.

He sought restoration of his service records to reflect 20.02.1967 instead of 01.09.1964. The Works Manager rejected representation, and the petitioner was superannuated accordingly.

It was noted that the date of birth recorded in such a government servant’s service book at the time of entry into service by mandate of Rule 2 of the Uttar Pradesh Recruitment to Services (Determination of Date of Birth) Rules, 1974, has to be deemed as his correct date of birth for all purposes, which include superannuation.

Further, it was noted that, since there was no objection to the petitioner’s date of birth, which was initially recorded as 20.02.1967 and later changed based on a notarial affidavit furnished by the petitioner, the change was clearly in the teeth of Rule 2 of the Rules 1974.

High Court Held

The High Court held that, by virtue of Rule 3, the Rules of 1974 have an overriding effect over all other rules. Further, the petitioner’s date of birth, as originally recorded in his service book, i.e., 20.02.1967, was to be regarded as his correct and immutable date of birth. The conclusion, to the contrary, reached by respondents and orders impugned were, therefore, manifestly illegal.

Thus, impugned orders were to be quashed, and a mandamus was to be issued to respondents to ensure, amongst themselves, immediate reinstatement of the petitioner in service, together with all consequential benefits of salary, increment and seniority.

List of Cases Referred to

• Smt. Kalyani Devi v. State of U.P. [WRIT Appeal No. 7679 of 2024, dated 12-9-2024] (para 17).

The post DOB in a Govt. Servant’s Service Book Final for Retirement | HC appeared first on Taxmann Blog.

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Case Details: NSL Sugars Ltd. vs. Deputy Commissioner of Income-tax [2026] 182 taxmann.com 500 (Bangalore-Trib.)

Judiciary and Counsel Details

• Soundararajan K., Judicial Member & Waseem Ahmed, Accountant Member
• Suresh Muthukrishnan, CA for the Appellant.
• Dr K.J. Dhivya, CIT-DR for the Respondent.

Facts of the Case

The assesse, a public integrated sugar company, wrote off Rs. 3.79 crores representing loans/advances given to its wholly-owned subsidiary in Ghana. The advances were made in earlier years by making payments directly to the subsidiary’s vendors and were recorded as loans in the assessee’s books. The subsidiary was engaged in the same line of business and was incorporated to expand the assessee’s business outside India. Due to ongoing losses, its operations were closed, and the subsidiary entered liquidation.

The assessee claimed the write-off as a business loss/expenditure under section 37(1), contending that advances were made on commercial expediency and that the loss was incidental to the business. The Assessing Officer rejected the claim, holding that the write-off represented capital loss, that the assessee was neither a banking nor a money-lending company, and that the conditions of section 36(2) were not satisfied. He further held that commercial expediency was not established.

ITAT Held

On appeal, the Tribunal held that the assessee had set up a wholly owned subsidiary in Ghana to expand its sugar business and funded its initial operations by directly paying consultants and vendors on its behalf, which were recorded as loans/advances. The funding was for business purposes, and classifying the amounts as loans/advances rather than equity did not change the transaction’s true character.

Applying the principle that commercial expediency must be judged from a business person’s perspective, the loss arising from the subsidiary’s failure was incidental to the assessee’s business. The write-off of Rs. 3.79 crores was allowed as a deductible business loss under section 37(1), and the addition made by the Assessing Officer was deleted.

List of Cases Reviewed

• ACE Designers Ltd. v. Addl. CIT [2020] 120 taxmann.com 321 (Karnataka)/[2020] 275 Taxman 138 (Karnataka)
• CIT v. Colgate Palmolive (India) Ltd. [2015] 59 taxmann.com 139 (Bombay)/[2015] 370 ITR 728 (Bombay)
• Cosmos Industries Ltd. v. DCIT [IT Appeal No. 3730 (Del) of 2015]
• REFEX Industries Ltd. v. Dy. CIT [2022] 139 taxmann.com 213 (Chennai-Trib.) (para 25.4) followed.
• ITA No. 772/Bang/2019 (32.3) followed.

List of Cases Referred to

• ACE Designers Ltd. v. Addl. CIT [2020] 120 taxmann.com 321 (Karnataka)/[2020] 275 Taxman 138 (Karnataka) (para 20.2)
• CIT v. Colgate Palmolive (India) Ltd. [2015] 59 taxmann.com 139 (Bombay)/[2015] 370 ITR 728 (Bombay) (para 20.2)
• REFEX Industries Ltd. v. Dy. CIT [2022] 139 taxmann.com 213 (Chennai – Trib.) (para 20.2)
• Cosmos Industries Ltd. v. DCIT [IT Appeal No. 3730 (Del) of 2015] (para 20.2)
• Ryatar Sahakari Sakkare Karkhane Niyamit v. Asstt. CIT [2016] 67 taxmann.com 283 (Karnataka)/[2016] 383 ITR 561 (Karnataka) (para 27.3)
• Kesha Appliances Pvt. Ltd. v. ITO [IT Appeal No. 2715 (Del) of 2016, dated 09.03.2018] (para 36.2)
• Sonicwall Technology System India Pvt. Ltd. v. ACIT [IT Appeal No. 3860 (Mum) of 2019, dated 02.12.2022] (para 36.2)
• Phool Singh v. ACIT [IT Appeal No. 2901 (Del) of 2014, dated 06.04.2017] (para 36.2).

The post Loan Write-off to Subsidiary Allowed as Business Loss | ITAT appeared first on Taxmann Blog.

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The National Financial Reporting Authority (NFRA) has published its first-ever newsletter, marking an important step in enhancing transparency around the audit regulator’s work, priorities, and expectations. The publication serves as a formal communication channel to engage with stakeholders across the financial reporting ecosystem.

1. Overview of Regulatory Priorities

The newsletter provides insights into NFRA’s regulatory focus areas, outlining how the authority intends to strengthen audit quality and uphold the integrity of financial reporting. It highlights NFRA’s approach to supervision, enforcement, and standard-setting, offering clarity on the themes that will guide its oversight activities going forward.

2. Key Oversight Observations from Audit Reviews

A significant part of the newsletter discusses key observations emerging from NFRA’s audit inspections and reviews. These observations reflect recurring deficiencies and areas of concern identified during oversight, and signal the regulator’s expectations regarding professional scepticism, documentation, independence, and compliance with auditing standards.

3. Emphasis on Accountability and Professional Conduct

The publication underscores NFRA’s emphasis on accountability, ethical conduct, and professional discipline. It reiterates the regulator’s commitment to ensuring that auditors discharge their responsibilities with due care, objectivity, and independence, thereby reinforcing confidence in the audit profession.

4. Strengthening Trust in Financial Reporting

By sharing its perspectives and expectations, NFRA aims to build greater trust in financial statements and audit processes. The newsletter highlights the role of high-quality audits in protecting public interest and maintaining the credibility of India’s financial reporting framework.

5. Signals for Auditors, Preparers, and Users of Financial Statements

The newsletter also serves as a forward-looking guide for auditors, preparers, and users of financial statements, offering early signals on areas that may attract closer regulatory scrutiny. Stakeholders are encouraged to align their practices with NFRA’s expectations to mitigate compliance risks and enhance overall reporting quality.

6. Way Forward

NFRA’s inaugural newsletter sets the tone for ongoing engagement with the profession and other stakeholders. Going forward, such communications are expected to play a key role in promoting regulatory clarity, improving audit outcomes, and strengthening confidence in India’s financial reporting and governance landscape.

Click Here To Read The Full Story

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Editorial Team – [2026] 182 taxmann.com 808 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. Japan to Implement Pillar Two Side-by-Side Package

Japan’s Ministry of Finance has issued a Cabinet Decision dated 23 January 2026 to align the country’s Pillar Two global minimum tax framework with the OECD’s side-by-side package released on 5 January 2026. Under this decision, Japan will revise its rules as follows:

• Exemption for Certain Parent Jurisdictions – Multinational groups headquartered in specified jurisdictions that maintain internationally recognised minimum tax regimes such as those with a corporate tax rate of at least 20% and a domestic minimum tax will have their GloBE top-up tax reduced to zero.
• Extension of Transitional Safe Harbor: The transitional Country-by-Country Reporting (CbCR) safe harbor will be extended by one additional year, remaining in effect through the end of 2027.
• Treatment of Investment Tax Credits – Certain investment-related tax credits may be included in covered taxes to mitigate unintended top-up tax exposure, subject to defined limitations.
• Revisions to UTPR Residual Tax Allocation – The approach to allocating residual top-up tax under the UTPR-equivalent mechanism will be refined.
• Updates to Local Inhabitant Taxes – Conforming amendments will be introduced to Japan’s local corporate inhabitant tax rules.

These revisions will apply to fiscal years beginning on or after 1 January 2026.

Source – Cabinet Decision

2. South Africa Lowers Interest Rates on Outstanding Taxes and Overpayments

The South African Revenue Service (SARS) has released updated interest rate tables dated 22 January 2026, reflecting the following adjustments:

• Table 1 – Interest on outstanding taxes and refunds – The interest rate applicable to unpaid taxes, duties, and levies, as well as interest payable on tax refunds arising from successful appeals and certain delayed refunds, has been reduced from 10.50% to 10.25%, effective 1 March 2026. This follows an earlier reduction from 10.75% to 10.50% effective 1 November 2025.
• Table 2 – Interest on credit balances – The interest rate payable on credit amounts, including overpayments of provisional tax, has been lowered from 6.50% to 6.25%, effective 1 March 2026. This comes after a prior decrease from 6.75% to 6.50% effective 1 November 2025.

The interest rates under both tables are linked to the rate prescribed under section 80(1)(b) of the Public Finance Management Act, 1999 (PFMA), which sets the standard interest rate for debts owed to the State. The PFMA rate was most recently reduced from 10.50% to 10.25% with effect from 1 January 2026, as announced by the National Treasury. However, for income tax purposes, the revised rate becomes applicable only from the first day of the second month following its implementation under the PFMA namely, 1 March 2026.

Source – South African Revenue Service

Click Here To Read The Full Article

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Case Details: Bhavi Shreyansh Shah Liquidator of Greendiamz Biotech Ltd. vs. Champat Singhvi - [2026] 182 taxmann.com 158 (NCLT-Ahd.)

Judiciary and Counsel Details

• Shammi Khan, Judicial Member & Sanjeev Sharma, Technical Member
• Arjun Sheth, Adv. for the Applicant.

Facts of the Case

In the instant case, the CIRP was initiated against the corporate debtor by the NCLT, and an RP was appointed. The Applicant, being the RP, filed the instant application under Section 66, alleging that the respondent, suspended management, had entered into preferential transactions, unlawful transactions, undervalued and fraudulent transactions, wrongful trading, and had committed misconduct during the CIRP.

The NCLT observed that, considering consistent judicial pronouncements holding that the 130-day timeline under Regulation 35A is directory, the delay in filing the instant application due to completion of the transaction audit was condonable. Accordingly, the instant application was not barred by limitation.

Further, it was observed that the forensic audit report revealed that the suspended management had repaid unsecured loans amounting to Rs. 48.88 lakhs to related parties (directors and their relatives) before the dues of financial creditors. Such transactions constituted preferential transactions under Section 43.

The unexplained bogus capitalisation of alleged R&D expenses aggregating to Rs. 7.06 crores, followed by their complete write-off without any supporting evidence, amounted to carrying on business for a fraudulent purpose.

Book entry adjustments involving crediting unsecured loans to related parties without corresponding actual fund inflows constituted preferential transactions under Section 43. Held: Yes.

NCLT Held

The NCLT held that, since the respondents had failed to discharge the burden cast upon them under Section 43(3) read with Sections 44 and 66 to demonstrate that the impugned transactions were undertaken in the ordinary course of business or financial affairs of the corporate debtor, or that they had provided new value or were otherwise exempt, they were jointly and severally liable to make restitution of the benefits received through the preferential transactions and fraudulent trading, and were required to reverse and restore the said amounts to the corporate debtor.

List of Cases Reviewed

• Prasant Chandra Rath v. Surya Kanta Satapathy [2023] 149 taxmann.com 390 (Para 8.4)
• Tata Steel BSL Ltd. v. Venus Recruiter Pvt. Ltd. [2023] 146 taxmann.com 300 (Para 8.5)
• Anubhav Anilkumar Aggarwal v. Rajendra Kumar Girdhar [2025] 180 taxmann.com 730 (NCLAT- New Delhi)/(2025) (Para 11.7) followed

List of Cases Referred to

• Chandresh Jajoo v. Vikas Garg Vikas Garg, Liquidator of Hema Engineering Industries Ltd. [Comp. App. (AT) (Ins) No. 1713 of 2025] (para 6.9)
• Aditya Kumar Tibrewal v. Om Prakash Pandey [2022] 138 taxmann.com 433 (NCLAT- New Delhi) (para 6.9)
• Shekhar Arvind Parkhi Resolution Professional For Green India Building Systems and Services Private Ltd. v. Arun Shenoy [IA No.4565 of 2024] (para 6.9)
• Prasant Chandra Rath v. Surya Kanta Satapathy [2023] 149 taxmann.com 390 (NCLAT- New Delhi) (para 8.4)
• Jagdish Kumar Parulkar Jagdish Kumar Parulkar, Resolution Professional of Tayal Foods Ltd. v. Vinod Agarwal [2024] 167 taxmann.com 29 (NCLAT- New Delhi) (para 8.4)
• Tenny Jose v. Prathap Pillai, Resolution Professional of Tenny Jose Ltd. [2023] 155 taxmann.com 178 (NCLAT – Chennai) (para 8.4)
• Tata Steel BSL Ltd. v. Venus Recruiter Pvt. Ltd. [2023] 146 taxmann.com 300 (Delhi) (para 8.5)
• Anuj Jain v. Axis Bank Ltd. [2020] 114 taxmann.com 656 (SC) (para 9.6)
• Phoenix Arc Pvt. Ltd. v. Spade Financial Services Ltd. [2021] 124 taxmann.com 24/165 SCL 21 (SC) (para 9.6)
• GVR Consulting Services Pvt. Ltd. v. Pooja Bahry (2023) ibclaw.in 261 NCLAT (para 9.6)
• Chetan T. Shah v. Jayesh Vinod Valia (2023) ibclaw.in 120 NCLT (para 10.6)
• Anubhav Anilkumar Aggarwal v. Rajendra Kumar Girdhar [2025] 180 taxmann.com 730 (NCLAT- New Delhi) (para 11.7)
• Renuka Devi Rangaswamy v. Madhusudan Khemka [2023] 153 taxmann.com 118 (NCLAT – Chennai) (para 12.4)
• Regen Powetech Pvt. Ltd. v. Wind Construction Ltd. [2022] 145 taxmann.com 383 (NCLAT – Chennai) (para 12.4)
• Nalinesh Kumar Paurush v. Arvind Mittal [(CA) (AT) (Ins) No. 346 of 2024] (para 12.5).

The post Related Party Loan Repayment Held Preferential | NCLT appeared first on Taxmann Blog.

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Case Details: DGAP vs. Kolte Patil Developers Ltd. - [2026] 182 taxmann.com 633 (GSTAT-NEW DELHI)

Judiciary and Counsel Details

• Mayank Kumar Jain, Judicial Member & Anil Kumar Gupta, Technical Member

Facts of the Case

The assessee, a builder, was alleged to have engaged in profiteering under the anti-profiteering provisions in the real estate sector, and the Director General of Anti-Profiteering (DGAP) computed the amount of profiteering at Rs. 67,02,147. The assessee submitted that it was ready to pay the said amount as determined by DGAP and requested that a period of three months be granted to make the payment, on the ground that the disbursement was to be made to numerous homebuyers. An undertaking was furnished by the assessee agreeing to pay the computed amount to eligible homebuyers. The matter was accordingly placed before the Goods and Services Tax Appellate Tribunal (GSTAT).

GSTAT Held

The GSTAT held that in view of the undertaking furnished by the assessee, the report of DGAP was liable to be accepted. It was observed that the quantified profiteering amount, as determined by DGAP, was not disputed and was agreed to be paid to eligible homebuyers. Referring to Section 171 and Rule 133(3) of the CGST Rules, the GSTAT concluded that the assessee was liable to deposit the profiteered amount along with applicable interest. Accordingly, the assessee was directed to pay the determined amount to the eligible homebuyers in terms of the statutory provisions.

The post Builder Directed to Pay Profiteering Amount to Homebuyers | GSTAT appeared first on Taxmann Blog.

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Case Details: Vijaya Bank vs. Prashant B Narnaware - [2025] 181 taxmann.com 894 (SC)

Judiciary and Counsel Details

• Joymalya Bagchi & Pamidighantam Sri Narasimha, JJ.
• Rajesh Kumar Gautam, Likivi K. Jakhalu, Deepanjal Choudhary, Sushant Kumar Yadav, Prateek Yadav, Gaurav Lomes, Prithvi Yadav, Rahul Chitnis, Ms Shwetal, Aditya Khanna, Surya Prakash, Ms Divya Singh Pundir, Devesh Dubey, Ms Shubhra Kapur, Sanjiv Goel, Annu Mishra, Advs., Chander Shekhar Ashri, Sanjay Kapur, Ms Asha Gopalan Nair, AORs and S.R. Singh, Sr. Adv. for the Appearing Parties.

Facts of the Case

In the instant case, the Respondent was appointed as Senior Manager in the appellant bank. In his appointment letter, Clause 11(k) stated that he was required to serve the bank for a minimum period of three years and execute an indemnity bond for ₹2 lakhs, payable in the event he resigned from the services of the bank before completion of the stipulated minimum period of three years.

The Respondent tendered his resignation before completion of three years in order to join another bank and paid a sum of ₹2 lakhs to the appellant bank. Thereafter, the Respondent filed a writ petition before the High Court seeking the quashing of Clause 11(k) of the appointment letter, alleging that the same was in violation of Section 27. The High Court allowed the writ petition.

Supreme Court Held

The Supreme Court observed that a restrictive covenant operating during the subsistence of an employment contract does not place a clog on the freedom of a contracting party to engage in trade or employment. Clause 11(k) sought to impose a restriction on the Respondent’s option to resign, thereby perpetuating the employment contract for a specified term.

Further, Clause 11(k) of the appointment letter amounted to a restraint of trade or was opposed to public policy. The object of the restrictive covenant was in furtherance of the employment contract and not to restrain future employment and, hence, was not violative of Section 27.

Accordingly, the Supreme Court held that the impugned order passed by the High Court was liable to be set aside.

List of Cases Reviewed

• Order of High Court, Karnataka at Bengaluru in WA-1159-2013, dated 20-08-2014 (para 36) set aside

List of Cases Referred to

• K.Y. Venkatesh Kumar v. BEML Ltd [Writ Appeal No.2736 of 2009, dated 9-12-2009] (para 8)
• Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co 1967 SCC OnLine SC 72 (para 13)
• Superintendence Company (P) Ltd. v. Krishan Murgai (1981) 2 SCC 246 (para 14)
• Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly [1986] 60 COMP CASE 797 (SC) (para 19)
• Haryana Financial Corporation v. Jagdamba Oil Mills (2002) 3 SCC 496 (para 34).

The post Early Resignation Damages Clause Valid – No Restraint of Trade | SC appeared first on Taxmann Blog.

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Case Details: Jyoti Agro vs. Deputy Commissioner of State Tax - [2026] 182 taxmann.com 630 (Gujarat)

Judiciary and Counsel Details

• A.S. Supehia & Pranav Trivedi, JJ.
• Avinash Poddar & Gaurang Shah for the Member.
• Ms Shrunjal Shah, AGP & Ms Anchal A. Poddar for the Respondent.

Facts of the Case

The petitioner-assessee filed an application seeking a refund of accumulated IGST arising from zero-rated supplies, but was unable to upload shipping bills on the GST portal due to size constraints. The petitioner submitted that attempts were made to furnish hard copies of the shipping bills, which were not accepted by the jurisdictional officer under CGST. It was contended that the refund claim was rejected on the ground that the undertaking or declaration was not properly signed, alleging non-compliance with the guidelines prescribed under Circular No. 125/44/2019-GST, dated 18-11-2019. It was further submitted that upon rejection of the refund claim, the amount was re-credited through Form GST PMT-03 into the electronic credit ledger, following which another refund application was attempted to be filed, but the GST portal displayed an error indicating that an application for the same period had already been filed. Thereafter, a fresh refund application was filed under the category ‘Any Other,’ against which a deficiency memo was issued stating that the application was not in accordance with Rule 89 of the CGST Rules and that the refund amount had not been debited from the electronic credit ledger. Reliance was placed upon judicial precedents to contend that procedural limitations of the electronic system should not defeat a substantive refund claim. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that where substantive conditions are satisfied, a refund cannot be denied due to technical errors or lacunae in the electronic system. It was observed that the inability to upload shipping bills due to portal size constraints and non-acceptance of hard copies resulted in procedural difficulties that could not defeat a legitimate claim. The High Court referred to Section 54 of the Gujarat GST Act and Rule 89 of the Gujarat GST Rules and concluded that procedural requirements should not override substantive compliance. Relying on judicial precedents, it was held that benefits otherwise admissible cannot be denied on account of technical limitations of the portal, and the respondent authority was directed to pass an appropriate order in accordance with law.

List of Cases Reviewed

• Shree Renuka Sugars Ltd. v. State of Gujarat [2023] 152 taxmann.com 550/100 GST 159/78 GSTL 324 (Gujarat) (para 2), followed

List of Cases Referred to

• Shree Renuka Sugars Ltd. v. State of Gujarat [2023] 152 taxmann.com 550/100 GST 159/78 GSTL 324 (Gujarat) (para 2).

The post GST Refund Not Denied for Portal Upload Limits | HC appeared first on Taxmann Blog.

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