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IN THE HIGH COURT OF DELHI
Manmohan, Navin Chawla, JJ.
Ajanta Industries - Appellant
Versus
Commissioner of Central Goods and Services Tax - Respondent
W.P.(C) 6609 of 2021
Decided On : 16-07-2021
| Table of Content |
|---|
| 1. challenge to refund rejection order (Para 1) |
| 2. petitioner's arguments for gst refund (Para 2) |
| 3. findings of fake itc issue (Para 3) |
| 4. requirements for clean hands in writ jurisdiction (Para 4) |
| 5. court's refusal to entertain writ petition (Para 5) |
| 6. counsel's filing issues noted (Para 6) |
| 7. order to be uploaded and communicated (Para 7) |
JUDGMENT
Manmohan, J.: (Oral)--The hearing has been conducted through video conferencing.
CM No.20760/2021
Allowed, subject to all just exceptions.
Accordingly, the application stands disposed of.
W.P.(C) 6609/2021
1. Present writ petition has been filed challenging the rejection order dated 04th April 2021 passed by respondent no.2 in RFD-06. Petitioner seeks refund of Rs.2,05,05,890/- for the period of April 2020-May 2020 along with interest thereon in accordance with law.
2. Learned counsel for the petitioner states that the petitioner was unable to discharge its GST liability in the third half of the year 2020-21 due to financial constraints. He states that the petitioner had duly filed all its returns upto April and May 2020 and is entitled to refund within sixty days from the date of filing Form GST-RFD-01 in accordance with Section 54 (7) of the Central Goods and Services Tax Act, 2017. He states that as per Rule 90 of CENTRAL GOODS AND SERVICES TAX RULES , it is mandatory to issue the acknowledgement in RFD-02 within fifteen days and if not done, all further proceedings would be without jurisdiction. Consequently, according to learned counsel for petitioner, due to lapse of time, the respondent is bound to grant refund as prayed for.
3. However, a perusal of the impugned order reveals that very serious findings of fake Input Tax Credit have been given by the respondent no. 2 in the impugned order. The relevant portion of the impugned order is reproduced hereinbelow:-
"6. Discussion and Findings.
xxxx xxxx xxxx xxxx
6.2 Show Cause Notice has been issued to the taxpayer on the basis of findings reported by the Anti Evasion, Branch summarised as below:-
i. Premise found locked during visit on 06.07.2020;
ii. L2 supplier found non-existent at the declared business premises;
iii. Mismatch in HSN of ITC passed on outward supplies and HSN of ITC received on inwards supplies;
iv. L2 suppliers have issued fake and bogus invoices and passed on fake ITC;
v. Summons issued to L1 suppliers have been received back undelivered.
xxxx xxxx xxxx xxxx
It is evident that Section 54 (3) the GST Act envisages refund of unutilized input tax credit under only two circumstances viz. zero-rated supplies made without payment of tax and credit accumulated on account of inverted tax structure, however subject to provisions of sub-section 10 of section 54 of CGST Act, 2017.
6.5 I further notice that as per GSTR-2A, the taxpayer has received Input tax credit mainly from three L1 stage suppliers, viz. M/s Gaurav Industries (07 AAVFG0017C1ZQ); M/s Isha International (07 AAHFI5290D1ZF) and M/s Ganesh Industries (07AATFG4715BlZH).
6.6 As per GST portal, the GST registration of M/s Gaurav Industries and M/s Isha International have been cancelled suo mota by GST department with effect from 14.03.2020 and 24.04.2019 respectively, however, as per GSTR-2A, they had supplied goods in the month of April 2020.
6.7 Further, the Anti Evasion branch has reported that the premises of taxpayer was visited on 06.07.2020 and it was found locked; that Summons dated 14.07.2020 was issued to Sh. Narender Kumar Saini, partner in M/s Ajanta Industries, in relation to another firm M/s Sadhana Pharma Indus tries which is also under investigation; that Sh. Narender Kumar Saini neither appeared nor submitted any documents till date; that during analysis of Input Tax Credit availed by the taxpayer, it was seen that one of the L2 supplier of the taxpayer i.e M/s Sagar International (07ADVFS8382F1ZA) had made outward supplies and passed ITC for medicine (HSN -3004) and Ready made Garments & Synthetic Wallets (HSN; 62, 4202),
A petitioner in a writ jurisdiction must approach the court with clean hands; unchallenged allegations of misconduct can justify denial of relief.
A petitioner invoking writ jurisdiction must approach the court with clean hands, and failure to challenge adverse findings may lead to dismissal of the petition.
The exclusion period provided in the notification issued by the Central Board of Indirect Taxes and Customs allowed for the period affected by the COVID-19 pandemic to be excluded for the purposes of....
The court established that the extension of the limitation period for GST refund applications due to COVID-19 applies retroactively to claims made during that period.
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 establishes that tax authorities must issue refund orders within sixty days as mandated by statute, failing which, interest and damages may apply.
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.
The main legal point established in the judgment is that the refund claim for unutilised ITC must be made within the prescribed time limit and should be determined with reference to relevant document....
The main legal point established in the judgment is that the date of filing the application on the common portal should be considered as the date of filing the claim for refund, rejecting the content....
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