Thiruvananthapuram Bench rules that inadvertent misreporting of export turnover in GSTR-3B cannot deny refund of excess IGST paid, upholding constitutional protections against unauthorized tax retention.
In a significant ruling on October 16, 2026, the Goods and Services Tax Appellate Tribunal (GSTAT), Thiruvananthapuram Bench, delivered a landmark judgment in favor of Associated Cashews, an exporter of cashew kernels, by allowing refunds of excess Integrated Goods and Services Tax (IGST) paid on exports despite clerical errors in GST returns. The case arose from the appellant's claim that due to inadvertent misreporting of export turnover and IGST in the wrong table of their GSTR-3B returns for the months of November 2018, December 2018, and February 2019, the automated Customs Electronic Data Interchange (EDI) refund system was unable to process their refund claims.
The appellant had correctly paid IGST on exports and properly disclosed the export invoices in GSTR-1 returns. However, while filing the GSTR-3B returns, the export turnover and corresponding IGST were mistakenly reported under Table 3.1(a) (intended for domestic taxable supplies) instead of Table 3.1(b) (intended for zero-rated exports). This clerical error caused a mismatch with Customs data, resulting in non-processing of automatic refunds. To rectify this, the appellant paid the same IGST amount again in August 2019, correctly reported under Table 3.1(b), and received refunds through the automated Customs system for this second payment.
Despite this, the appellant sought refund of the original IGST payments made in the earlier months, arguing these amounts constituted excess payments due to the double payment caused by the clerical mistake. The GST authorities rejected these refund claims, and the first appellate authority dismissed the appeals on the grounds that the appellant had already received refunds for the amounts paid in August 2019.
Upon hearing appeals filed by Associated Cashews, the Tribunal found that the lower authorities had failed to distinguish between the refund of the second payment and the refund claim for the original payment. The Tribunal emphasized that tax cannot be retained by the government without clear legal authority as mandated by Article 265 of the Constitution of India. It held that the original payments made during the respective months remained excess IGST paid and were refundable, notwithstanding the procedural mistake in return filing.
The Tribunal further observed that the clerical error was a minor procedural lapse, apparent on record, and duly explained by the appellant through reconciliation statements. Such errors cannot be treated as substantive infractions justifying denial of refund. Moreover, the Tribunal referred to authoritative judgments by the Orissa High Court and Karnataka High Court, which support the principle that refunds of tax paid erroneously or under mistaken notions cannot be denied on technical grounds or limitation pleas, especially when excess payment is undisputed.
Importantly, the Tribunal quashed the first appellate authority's mechanical rejection of the appeal without proper examination of the facts and directed that the refund be granted with consequential relief. The ruling reinforces the taxpayer's right to recover excess tax paid due to inadvertent errors and underscores the constitutional prohibition against unauthorized tax collection or retention.
This judgment is expected to provide relief to exporters and taxpayers facing refund issues arising from procedural errors in GST returns and to guide revenue authorities in adopting a fair and constitutionally compliant approach towards refund claims.
Bottom Line:
GST - Refund of excess paid IGST on exports cannot be denied merely because export turnover/IGST was wrongly disclosed in the wrong table of GSTR-3B due to clerical error - Where assessee paid IGST at the time of export and, due to mismatch caused by wrong reporting in GSTR-3B, again paid the same IGST in a later return to obtain EDI refund, the earlier payment became excess payment refundable to assessee - Revenue cannot retain tax without authority of law under Article 265 of the Constitution.
Statutory provision(s):
Central Goods and Services Tax Act, 2017 Section 54, Integrated Goods and Services Tax Act, 2017, Constitution of India, 1950 Article 265
