Section 54 of the CGST Act, 2017 —– Refund - The petitioner challenged order dated 30.06.2020 passed by the Appellate authority insofar as the said order allowed refund to the petitioner after debiting the IGST standing in the credit ledger account of the petitioner. Also prayed to set aside the communication dated 14.07.2020, Order in original dated 14.07.2020 and prayed for direction to refund of Rs. 21,71,74,611/-, which is unutilised ITC to be refunded. The petitioner on 17.04.2019 sought refund of unutilised credit of Rs. 31,58,80,475/-, comprising of the amounts towards CGST, SGST and the cess under Section 54(3) (i) of the Act on the ground that the petitioner had made zero rated supplies, which was rejected on the ground that the petitioner did not follow 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. The petitioner preferred appeal against the aforesaid order dated 20.06.2019. The appellate authority by order dated 30.06.2020 held that the petitioner was eligible for refund of Rs. 21,71,74,611/-, but at the same time, allowed the petitioner to file a fresh claim after deducting IGST by following the procedure provided in the aforementioned Circular. The court observed that as the petitioner had debited the total amount of refund claim prescribed in the Rule in its electronic credit ledger, the requirement was met with. Merely because the debit was not made in the sequence mentioned in the Circular, the refund claim could not have been rejected. Even otherwise, no undue benefit was taken by the petitioner by not adhering to the order of refund.

Held that:- The Hon’ble High Court set aside the Order in Appeal dated 30.06.2020, Communication dated 14.07.2020, Order in original dated 14.07.2020 and further held that non-compliance of the procedure in paragraph 3.2 of the circular dated 04.09.2018 will not dis-entitle the petitioner from claiming the refund amount. The respondent shall make the payment of refund to the petitioner to the tune of Rs.21,71,74,611/- with statutory interest within eight.