The Delhi High Court ( HC ) has held that refund under section 54 of the Central Goods and Services Tax Act, 2017(CGST) is allowable when no tangible reason to doubt the particulars.
Mahajan Fabrics Pvt. Ltd, the petitioner had applied for a refund of CGST under Section 54 of the Central Goods and Services Tax Act, 2017 (‘the Act’) read with Rule 89(1) of the Central Goods and Services Tax Rules, 2017 (‘the Rules’).
As per Section 54(3) of the CGST Act, 2017, a registered person may claim a refund of the unutilised input tax credit at the end of any tax period. A tax period is a period for which a return is required to be furnished.
The said application was allowed by the Order-in-Original and an amount of ₹22,32,502/- was directed to be remitted to the specified bank account of the petitioner. The same comprised ₹16,22,489/- as a refund of the Central Tax (CGST) and ₹6,10,013/- as State Tax (SGST).
The Commissioner reviewed under Section 107(2) of the Act and directed that the appeal be preferred to the Appellate Authority. It was observed 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 was issued by M/s Artex Overseas Pvt. Ltd., was not reflected in the e-vahan portal. The Commissioner were dubious and the claim for a refund of tax was inadmissible.
The refund was held as inadmissible solely on the assumption that since the vehicles mentioned in two invoices were not found registered on the e-vahan portal, the details given in the other invoices were also unreliable. As per the explanation of Section 16(2)(b) of the Act that the person would be deemed to have received the goods if the conditions, as stated therein, are satisfied.
A two-member bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that the petitioner had filed its return disclosing all necessary details for claiming the refund. The review order dated 15.03.2020 to file an appeal against the Order-in-Original is founded on an erroneous finding.
Further viewed that there is neither any tangible reason to doubt the particulars, as stated in the invoices nor any finding that the same is untrue. While allowing the petition, the Court set aside the impugned order dated 30.12.2021. The respondents are directed to disburse the amount of refund sanctioned by the Assistant Commissioner in terms of the Order-in-Original dated 12.09.2019.
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