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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
M/s Mahajan Fabrics Pvt. Ltd. – Appellant
Versus
Commissioner, CGST & Ors. – Respondents
W.P.(C) 6727 of 2022
Decided On : 06-02-2023
Refund - Central Goods and Services Tax Act, 2017 - Section 54, Rule 89(1) - Section 16(2)(b) - Section 16(2)(b) Explanation
Fact of the Case:
The petitioner filed a petition against an order allowing the Revenue's appeal against a refund application under the Central Goods and Services Tax Act, 2017. The Commissioner directed the appeal based on a finding that vehicles mentioned in two invoices were not reflected on the e-vahan portal, leading to a conclusion that the refund claims were dubious.
Finding of the Court:
The Court found that the Commissioner's decision to file an appeal was based on an erroneous finding, as the Appellate Authority later found the vehicles to be registered on the e-vahan portal. The Court held that the Revenue's appeal was flawed, and the petitioner was not required to provide further details. The petition was allowed, and the impugned order was set aside.
Issues: The main issue was the validity of the refund claims based on the registration of vehicles mentioned in the invoices on the e-vahan portal.
Ratio Decidendi: The Court emphasized that the Commissioner's decision to file an appeal was flawed, and the petitioner had fulfilled the necessary conditions for claiming the refund. The Appellate Authority's finding that the vehicles were registered on the e-vahan portal undermined the basis of the Revenue's appeal.
Final Decision: The petition was allowed, and the impugned order was set aside. The respondents were directed to disburse the amount of refund sanctioned by the Assistant Commissioner.
JUDGMENT
Vibhu Bakhru, J. (Oral)
1. The petitioner has filed the present petition impugning an order dated 30.12.2021 passed by the Joint Commissioner of Central Goods and Services Tax (Appeals-1) [Order-in-Appeal No. 445/JC/Central Tax/Appeal-I/Delhi/2021] (hereafter `the impugned order') allowing the Revenue's appeal against an order dated 12.09.2019 (Order-in-Original) passed by the Assistant Commissioner.
2. The petitioner had filed an application for refund of CGST under Section 54 of the Central Goods and Services Tax Act, 2017 (hereafter `the Act') read with Rule 89(1) of the Central Goods and Services Tax Rules, 2017 (hereafter `the Rules').
3. The said application was allowed by the Order-in-Original dated 12.09.2019 and an amount of Rs.22,32,502/- was directed to be remitted to the specified bank account of the petitioner. The same comprised of Rs.16,22,489/- as refund of the Central Tax (CGST) and Rs.6,10,013/- as State Tax (SGST).
4. The aforesaid order was reviewed by the Commissioner under Section 107(2) of the Act. In terms of the said provision, the Commissioner directed that the appeal be preferred to the Appellate Authority [in this case, the Joint Commissioner (Appeals)].
5. The review order dated 15.03.2020, directing the filing of the appeal, indicates that the decision to appeal the Order-in Original dated 12.09.2019 was premised on a finding that the vehicle numbers mentioned in two invoices [Invoice No. GST/19-20/174 dated 04.05.2019 (vehicle no. DL01 LY 4032) and Invoice No. GST/19-20/208 dated 11.05.2019 (vehicle no. DL01 LY 4411), which were issued by M/s Artex Overseas Pvt. Ltd., were not reflected at the e-vahan portal. The Commissioner, therefore, concluded that the 126 invoices - in respect of which the refund was sought - were dubious and the claim for refund of tax was inadmissible.
6. It is important to mention that only a few of the 126 invoices were picked up for scrutiny and the conclusion, that the refund is inadmissible (in review order dated 15.03.2020), was founded solely on the assumption that since the vehicles mentioned in two invoices were not found registered on e-vahan portal, the details given in the other invoices were also unreliable.
7. In view of the Commissioner's review order dated 15.03.2020, directing that an appeal be filed against the Order-in-Original dated 12.09.2019, the Revenue preferred the appeal on the grounds as stated in the review order dated 15.03.2020 and as briefly noted above.
8. The Appellate Authority [Joint Commissioner (Appeals)] found that the vehicles mentioned in the two invoices that were picked up for scrutiny were, in fact, registered with the e-vahan portal. Paragraph 6.5 of the said impugned order reads as under:
"6.5 It is observed that out of 126 invoices on the basis of which refund claim is filed, only 2 vehicles were selected for scrutiny. The documents submitted by the respondent in respect of these two vehicles now are found to be reflected in e-vahaan portal. However, I find that in respect of remaining 124 invoices, the respondent had neither submitted e vahaan details nor submitted any evidence to substantiate that they had actually received the goods. In the absence of such details, I do not agree with the contention of the respondent. Merely filing of returns, GSTR-2A, Statement-3, Shipping Bills date, EGM details etc. for claiming refund of unutilized ITC is not enough to prove bonafide. There was no compliance with the provisions of Section 16 of the CGST Act, 2017."
9. Notwithstanding that the Appellate Authority had found that the two vehicles were registered on the e-vahan portal, it allowed the Revenue's appeal on the ground that the petitioner had not established that the goods had been received by providing details of other vehicles in respect of the remaining 124 invoices.
10. Ms. Narang, learned counsel appearing for the respondents, submits that it was incumbent upon the petitioner to produce details of all the i
The Court highlighted the importance of fulfilling the eligibility conditions for claiming input tax credit under Section 16 of the Central Goods and Services Tax Act, 2017.
The court emphasized the impermissibility of the respondents' failure to process the petitioner's claim for refund in light of the appellate authority's order, while also clarifying that the order wo....
The eligibility of a merged entity for ITC refund is recognized under GST, allowing inclusion of export proceeds from previous tax regimes.
Despite the cancellation of GSTIN registration, a registered person is entitled to claim refunds under Section 54(3) of the Central Goods and Service Tax Act, 2017.
The rejection of refund applications cannot be solely based on suspicion without conclusive evidence. The petitioner is entitled to the refund of ITC on goods exported by it.
Taxpayer should be afforded an opportunity to be heard, and the Adjudicating Authority should determine the amount of refund admissible.
The main legal point established in the judgment is that an application for refund accompanied by the required documentary evidences cannot be ignored for the purposes of limitation, and Rule 90(3) c....
A taxpayer is not required to make repeated applications for seeking a refund after succeeding in appellate proceedings, and the refund claim is required to be processed in accordance with the law.
The court emphasized that in case of voluminous transactions of export of services to customers located outside India, transaction-wise FIRC is not feasible and a consolidated FIRC issued by the Bank....
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