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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
M/s Shri Shyam Footwear – Appellant
Versus
The Commissioner of Central Goods And Services Tax – Respondent
W.P.(C) 5845 of 2022
Decided On : 31-01-2023
Input Tax Credit - Refund Application - The court set aside the impugned orders and remanded the matter to the Adjudicating Authority to consider the petitioner's response to the Show Cause Notice and to decide the matter afresh. The petitioner's application for refund shall be processed within a period of four weeks.
Fact of the Case:
The petitioner filed a refund application for unutilised Input Tax Credit, which was initially rejected due to incomplete/inappropriate information. The petitioner rectified the error but the authorities did not consider the rectified information, leading to the rejection of the refund application.
Finding of the Court:
The court found that the authorities failed to consider the rectified information submitted by the petitioner and penalized the petitioner for an inadvertent error, which had since been rectified. The court set aside the impugned orders and remanded the matter for reconsideration.
Issues: The main issue was the rejection of the petitioner's refund application due to incomplete/inappropriate information, despite the petitioner rectifying the error and the authorities failing to consider the rectified information.
Ratio Decidendi: The court emphasized that the authorities should have examined the rectified information submitted by the petitioner and processed the refund claim in accordance with the law. The petitioner cannot be penalized for an inadvertent error that has been rectified.
Final Decision: The court allowed the petition, set aside the impugned orders, and remanded the matter to the Adjudicating Authority for reconsideration. The petitioner's application for refund was directed to be processed within four weeks, with the opportunity for the petitioner to be heard if the application is contemplated for rejection.
JUDGMENT
Vibhu Bakhru, J. (Oral)--The petitioner has filed the present petition, inter alia, impugning the order dated 09.02.2022 passed by respondent No. 2, and an order dated 17.06.2021 passed by respondent No. 3. Further, the petitioner prays that directions be issued to the respondents to release the unutilised Input Tax Credit aggregating to Rs.4,28,400/- (CGST being Rs.1,84,800/- and SGST being Rs.2,43,600/-).
2. The petitioner had filed a refund application in the relevant form (RFD-01), claiming refund of unutilised Input Tax Credit along with other necessary documents as prescribed under the Central Goods and Services Tax Act, 2017 (hereafter `CGST Act') and the rules made thereunder.
3. The said application was made on 07.04.2021 and the refund pertained to the period of October, 2020 to December, 2020. The online lodging of the form was acknowledged under a receipt bearing No. AA0704210185797. However, the petitioner's request for refund was not acceded to.
4. The concerned authority issued a notice dated 22.05.2021 indicating that the application was defective for the following reason:
"1. In Annexure-B (Statement of invoices to be submitted with application for refund of unutilized ITC) submitted incomplete/inappropriate information in column no. 7-Category of input supplies- Type Input/Input services/Capital Goods as "Goods"."
5. The petitioner responded to the said notice in FORM-GST-RFD-09 on 07.06.2021. The petitioner accepted the error in filling up the details in column no. 7 and filed a revised Annexure rectifying the information as in Column No. 7.
6. The petitioner claims that the aforesaid reply was uploaded on the portal and is duly reflected but the annexure thereto is not reflected in the portal.
7. Thereafter, the petitioner received an order dated 17.06.2021, rejecting the petitioner's application for refund for the reason as stated in the notice dated 22.05.2021. Apparently, the concerned authority had not taken note of the petitioner's annexure rectifying the necessary form, which was annexed with the reply dated 07.06.2021.
8. The petitioner appealed the said order dated 22.05.2021 to the Joint Commissioner Central Goods and Services Tax Appeal (Appellate Authority). The petitioner also filed written submissions enclosing therewith a copy of Annexure B to the reply submitted earlier, which, according to the petitioner, reflected the correct information.
9. Notwithstanding the same, the petitioner's appeal was rejected by an order dated 09.02.2022, inter alia, on the ground that Annexure B was not complete in all respect, as was necessary for processing the refund and the petitioner had failed to upload the same at the time of filing of the application.
10. It is apparent from the above that the rectified information as submitted by the petitioner was not taken into account by either of the concerned authorities while considering the petitioner's grievance regarding non-payment of its refund, as claimed.
11. We are of the view that it was essential for the concerned authorities to examine the information as submitted by the petitioner and process its claim for refund in accordance with law. Clearly, the petitioner cannot be penalised for the inadvertent error in submitting an erroneous information against Column No. 7 of its form, which has since been rectified.
12. In view of the above, we set aside the impugned orders dated 17.06.2021 and 09.02.2022 and remand the matter to the Adjudicating Authority to consider the petitioner's response dated 07.06.2021 to the Show Cause Notice dated 22.05.2021 and to decide the matter afresh.
13. The petitioner is also at liberty to submit a fresh copy of the revised annexure to the Adjudicating Authority.
14. The petitioner's application for refund shall be processed within a period of four weeks. If the Adjudicating Authority contemplates rejecting the petitioner's application for refund for any reason, it shall afford the petitioner, an opportuni
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