GST Dept cannot Deny ITC on Ground of Deficiency in Memo Once Taxpayer Succeeded in Appeal: Delhi HC [Read Order]

The Delhi High Court held that the Goods and Service Tax (GST) Department cannot deny the Input Tax Credit (ITC) on the ground of the deficiency in the memo filed by the taxpayer and once the taxpayer succeeded in appeal. 

Advance Systems, the petitioner filed a writ petition praying to issue a writ of mandamus and/ or any other appropriate writ, directing the GST department to sanction the refund claims filed by the petitioner. 

Siddharth Malhotra, the counsel for the petitioner contended that once an appeal has been succeeded before the appellate authority no fresh refund applications are to be filed. 

Further, even if an application was filed the proper officer had no power to hold the refund on any ground or to issue any Deficiency Memo/Show Cause Notice and has to forthwith grant the claim to the petitioner. 

Atul Tripathi and Amresh Kumar, the counsels for the department alleged that the applications were defective as it was not accompanied by an undertaking to the effect that the petitioner would refund the sanctioned amount along with interest in the case.

Further contended that it was found that the requirements of section 16(2)(c) of the CGST Act read with Section 42(2) of the CGST Act,2017 were not complied with in respect of the amount refunded. 

The Court observed that there was no requirement to furnish any further documents to substantiate the petitioner’s claim. Also observed that the petitioner was not required to make repeated applications for refund after it had prevailed in its appeals before the appellate authority. 

The two-member bench comprising Vibhu Bakhru And J Amit Mahajan, J allowed the refund of the claim of Input Tax Credit filed by the petitioner. 

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