The Hon’ble High Court of Delhi has been pleased to issue notice in the case of Insitel Services Pvt. Ltd. V. Union of India W.P. (C) 6486/2020, where the illegality of Rule 90(3) of the CGST Rules have been challenged.
It is pertinent to mention that Rule 90(3) of the CGST Rules provides for the filing of fresh refund application if a notice of deficiency in FORM RFD-03 has been issued to the assessee. To quote Rule 90(3) of the CGST Rules:
Rule 90(3): “Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in FORM GST RFD-03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies.”
The Challenge in the petition has been made to the Rule 90(3) for being ultra vires the Article 14 and Article 19(1)(g) of the Constitution of India. Alternatively the petitioner has also prayed that the Rule 90(3) may be read down to the effect that the rectification of deficiencies shall not be treated as submission of fresh application of refund for the purpose of computing limitation for refund applications and grant of interest on delayed refund.
If the Rule 90(3) is read down by the Hon’ble High Court of Delhi, it will be a great relief for the assessees, as in many cases, the initial refund applications are rejected by the authorities on trivial issues or procedural gaps, and once these applications are rectified, then they are considered as fresh refund applications as per Rule 90(3) of the CGST Rules, for the purpose limitation of 2 years, as well as the interest is counted from the date of refund application which has been filed in order to remove the deficiencies.
For your reference the Order has been attached as:Order