Case Details

• Case Title: AB Enterprises v. Commissioner of Delhi Goods and Services Tax

• Court: High Court of Delhi

• Petition No.: W.P.(C) 7919/2023

• Category of Dispute: Refund – Unutilised ITC on zero-rated supplies

• Date of Judgment: 21 November 2023

• Relevant Statutory Provisions:

  • Section 54, CGST Act – Refund of tax

  • Rule 89(2), (3), (4), Rule 90(2), 90(3), 90(5), CGST Rules – Documentation, acknowledgment, deficiency memo, and SCN procedure

Facts of the Case (Paras 1–5)

The petitioner, AB Enterprises, filed a refund application on 24.03.2022 seeking refund of ₹54,86,530/- representing unutilised Input Tax Credit accumulated on zero-rated supplies (exports) for December 2021. As acknowledged by the department (para 3), the application was accompanied by all documents enumerated on the GST portal, including Statement-3, computation sheet, declarations under Section 54(3)(ii), Undertakings under Section 16(2)(e) and Section 42, Annexure-B/GSTR-2A, and invoice-shipping bill summary.

Despite this, the application was not processed. Instead, the officer issued a Form GST RFD-03 dated 06.04.2022 stating only that “relevant supporting documents not attached” and “supporting documents incomplete.” The deficiency memo contained no particulars (para 4).
In counter-affidavit, the department alleged that documents such as shipping bills, transport bills, copies of invoices, BRC, CA certificate, and Rule 96B undertaking were not filed (para 5), though the officer conceded these are not part of mandatory documents under Rule 89(2).

The petitioner challenged RFD-03 on the ground that the application was complete under Rule 89(2) and deficiencies noted were extraneous and contrary to Rule 90(3). The plea of officer-incompetence was later not pressed (para 6).

Questions for Consideration

1. Whether an application complete under Rule 89(2) can be treated as “deficient” and returned through RFD-03 merely because the officer desires additional documents?

2. Whether deficiencies not falling within Rule 89(2), (3), and (4) can justify issuance of RFD-03 requiring refiling of refund?

3. Whether the officer’s action circumvents the statutory requirement of acknowledgment under Rule 90(1) and the timeline under Section 54(7)?

Court’s Observations (Paras 7–12)

The Court observed that the petitioner had admittedly filed all documents mandated under Rule 89(2) (para 9). Therefore, the application was “complete” and the officer was statutorily bound to issue acknowledgment under Rule 90(1); treating the application as deficient was impermissible (para 8).

The Court relied upon its earlier judgment in National Internet Exchange of India v. Union of India, Neutral Citation 2023:DHC:6002-DB, holding that:

• A deficiency memo under Rule 90(3) may be issued only where deficiencies exist under Rule 89(2), (3), (4) (para 10).

• Additional documents may be sought only through RFD-08, not through RFD-03 (para 10).

• A complete refund application cannot be rejected or returned merely because the officer requires further verification (para 10).

The Court further held that non-submission of documents not required under Rule 89(2) does not render the refund application “deficient.” The proper officer may always call for further information, but cannot force refiling, thereby resetting statutory timelines under Section 54(7) (paras 8, 12).

Accordingly, the Court found the deficiency memo ex facie non-compliant with the CGST Rules (para 11).

Judgment (Paras 11–13)

The High Court set aside the Form GST RFD-03 deficiency memo dated 06.04.2022.
The officer was directed to:

1. Issue acknowledgment under Rule 90 treating the application as complete.

2. Process the refund in accordance with law, without compelling the petitioner to refile.

3. Retain liberty to call for further documents or verification through RFD-08, if warranted.

The writ petition was disposed of accordingly.

Summary of Cases Referred (Tabular Form)

Between Fine Lines – Practical Takeaways for Industry

This judgment reaffirms that refund processing under GST is a rule-bound, not discretion-driven exercise. Where a taxpayer files all documents required under Rule 89(2), the department cannot issue a deficiency memo merely because it desires additional verification. Such conduct unlawfully resets timelines, delays refunds, and burdens exporters. Officers must either acknowledge the application or issue RFD-08 for seeking further information. Exporters should preserve filings and GST portal logs to establish compliance with Rule 89(2) and resist unwarranted RFD-03 memos.

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”