2021 (6) TMI 36 - HC - GST

Furnishing of solvent security against the release of 90% of IGST claimed by the petitioner by way of refund - HELD THAT - It is pertinent to note that the amount of refund involved in this case is ₹ 59,91,865/-. In addition, thereto, the petitioner also seeks release of duty draw back amounting to ₹ 4,10,616/- - Mr. Harpreet Singh is directed to take instructions as to whether the respondents would accept the title deed of the said property as security. List the matter on 04.06.2021.

Summary

Issues:
1. Verification of suppliers by GST departments in different regions
2. Delay in completion of enquiry by respondents
3. Compliance with time limits for enquiry under CGST Act
4. Provisional release of refund amount and security against it

Analysis:

Issue 1: Verification of suppliers by GST departments
The Senior Standing Counsel informed the court about the verification carried out by GST departments in different regions concerning the suppliers of the petitioner. Reports were generated for suppliers like M/s Sawariya Traders, Verma Mechanical Work, Puja Enterprises, Magma Enterprises, and Lotus Enterprises. It was found that some suppliers did not exist at the given address, and their registrations were cancelled due to non-filing of returns.

Issue 2: Delay in completion of enquiry
The petitioner argued that the enquiry had been ongoing since February 2020 with no conclusion in sight. The petitioner referred to circulars and communications indicating a delay in the process. The petitioner highlighted that the respondents were unnecessarily expanding the scope of the enquiry, causing a delay in granting the refund to the detriment of the petitioner.

Issue 3: Compliance with time limits under CGST Act
The petitioner relied on Section 54(6) & (7) of the CGST Act, stating that the enquiry should have been completed within sixty days. The petitioner emphasized that the shipping bill should be considered as a refund application, as per Rule 96 of the CGST Rules, 2017. Additionally, the petitioner argued for the provisional release of 90% of the claimed amount, excluding Input Tax Credit, as it was a zero-rated supply.

Issue 4: Provisional release of refund amount and security
The petitioner sought provisional release of the refund amount and highlighted the remittance of foreign exchange against exported goods. The petitioner offered an unencumbered immovable property in Yamuna Nagar, Haryana, valued at approximately ?70 lakhs as security against the release of 90% of the IGST claimed. The court directed the respondents to consider accepting the title deed of the property as security and instructed the petitioner to provide a copy of the title deed for evaluation.

The matter was listed for further proceedings on 04.06.2021 to address the issues raised regarding the delay in the enquiry process and the provisional release of the refund amount.