2022 (5) TMI 455 - HC - GST

Refund sanction - out of 126 invoices on the basis of which refund claim is filed, only 2 vehicles were selected for scrutiny - Dispute in two vehicles which carried the goods from the petitioner s factory premises - compliance of Section 16 of the CGST Act, 2017 or not - HELD THAT - Since the registration numbers of these vehicles were not found on the e-vahan portal, a red flag was raised - Concededly, the petitioner has filed the requisite documents to demonstrate that the vehicles are in existence - It appears that registration certificates and copies of insurance policies were also placed before the reviewing/appellate authority. Ms Sushila Narang, who appears on behalf of the respondents/revenue, are directed to place the relevant provisions of GST Act 2017/Rules which required the petitioner to file registration certificates and Insurance policies, along with the invoices; as noted above the remaining invoices in this case are 124 in number - Apart from relying upon Section 16 of the GST Act, 2017, Ms Narang has not able to satisfy qua this aspect - What is also curious is that if satisfaction was reached vis- -vis two invoices, Input Tax Credit (ITC) has been denied even vis- -vis these two invoices. The matter requires examination - List the matter on 23.08.2022.

Summary

Issues:
Challenge to the order of Joint Commissioner, CGST (Appeals-1) regarding refund sanction; Non-compliance with provisions of Section 16 of the CGST Act, 2017 for refund claim; Discrepancies in submission of e-vahaan details for invoices; Denial of Input Tax Credit (ITC) for two invoices; Requirement of examination of the matter.

Analysis:
The writ petition challenges the order of the Joint Commissioner, CGST (Appeals-1) dated 30.12.2021, which reviewed the refund sanction of Rs. 22,32,502/- granted to the petitioner on 12.09.2019. The impugned order raised concerns regarding the submission of e-vahaan details for 126 invoices, specifically noting discrepancies in the evidence provided for 124 invoices. The order emphasized the necessity of complying with Section 16 of the CGST Act, 2017 to substantiate refund claims. It highlighted that mere submission of returns and documents like GSTR-2A and Shipping Bills is insufficient for proving bonafide intentions.

The main issue arose concerning two vehicles that transported goods from the petitioner's factory, as their registration numbers were not found on the e-vahaan portal, leading to doubts. Despite the petitioner submitting documents proving the existence of these vehicles, including registration certificates and insurance policies, the reviewing authority remained unconvinced. The court requested the respondent's counsel to cite the specific provisions of the GST Act 2017/Rules mandating the submission of registration certificates and insurance policies along with invoices, especially for the remaining 124 invoices under scrutiny. However, the respondent's counsel failed to provide a satisfactory explanation apart from referencing Section 16 of the GST Act, 2017.

Furthermore, the court found it perplexing that even if satisfaction was established for two invoices, Input Tax Credit (ITC) was still denied for those invoices. Consequently, the court decided that a thorough examination of the matter was necessary and issued notice to the parties. The respondents/revenue accepted the notice, and the court directed the filing of counter-affidavits within six weeks, with a rejoinder, if any, before the next hearing scheduled for 23.08.2022. Pending the next hearing, the operation of the impugned order dated 30.12.2021 was stayed to prevent any immediate adverse actions against the petitioner.