2023 (4) TMI 864 - HC - GST

Refund claim on account of Input Tax Credit accumulated due to Inverted Tax Structure - petitioner failed to submit the books and as such the amount of refund to be sanctioned could not be determined without proper verification of books of account - HELD THAT - On perusal of the statutory provisions and the circular governing the field it is made clear that in order to get refund as per formula given under Rule- 89(5) the petitioner has to adhere to the said provisions. The prayer for refund has not been taken into consideration in proper perspective while passing the order impugned on the plea that the petitioner had not produced the relevant documents. What the petitioner had to submit that has already been mentioned in the provisions of the Act and Rules and CBIC guidelines. Had the petitioner adhered to the same no new plea would have been taken at this stage contending that since the petitioner had not produced books of accounts it is not entitled to get refund of the amount. The petitioner was issued with a show-cause notice in RFD-08 on 28.06.2022 for production of books of account i.e. input wise details of spare parts used during the assembling/manufacturing process of e-vehicles in order to ascertain the amount of inputs used during the assembling/manufacturing of e-vehicles only and fixing the date for personal hearing to 13.07.2022. The petitioner replied to the show-cause notice on 06.07.2022 and submitted the documents as mentioned at serial no. (a) to (i) in the said paragraph but the petitioner failed to submit the input wise details of spare parts used during the assembling/ manufacturing process of e-vehicles. Therefore no illegality or irregularity has been committed by the authority in rejecting the refund application of the petitioner. It is admitted on the part of the opposite parties that the dispute is with regard to refund of Rs.5, 18, 230/- which requires proper adjudication by the authority on production of documents as claimed by the opposite parties. Therefore excluding Rs.5, 18, 230/- out of Rs.2, 22, 97, 228/- the balance amount has to be refunded to the petitioner. If any further amount is found to be refundable the same can be paid after final adjudication. This Court directs the opposite parties to refund the balance amount excluding Rs.5, 18, 230/- from out of total amount of Rs.2, 22, 97, 228/- to the petitioner pending final adjudication of the disputed amount in accordance with law - Petition disposed off.

Summary

Issues Involved:

1. Rejection of Refund Application
2. Alternative Remedy
3. Compliance with Statutory Provisions and Submission of Documents
4. Mismatch in Net ITC Calculation

Summary:

1. Rejection of Refund Application:
The petitioner sought to quash the order dated 02.08.2022, which rejected their refund application for the period from December 2021 to January 2022. The petitioner claimed a refund due to accumulated Input Tax Credit (ITC) from an Inverted Tax Structure. Despite submitting all required documents, the refund was denied on the grounds that the petitioner failed to submit the entire books of account for the concerned period, making it impossible to determine the refund amount without proper verification.

2. Alternative Remedy:
The Additional Standing Counsel for the CT & GST Department argued that the petitioner should have availed the alternative remedy under Section-107 of the OGST & CGST Act instead of directly approaching the High Court. The counsel cited the case of Commissioner of Income Tax v. Chhabil Das Agarwal to support this contention.

3. Compliance with Statutory Provisions and Submission of Documents:
The court examined the relevant provisions of the OGST Act, CGST Rules, and CBIC Circular No.125/44/2019-GST. It was noted that the petitioner had adhered to the statutory requirements for claiming a refund. The court found that the rejection of the refund application was not justified as the petitioner had submitted all necessary documents, including Statement-1 and Statement-1A, as per Rule-89(5) of the CGST Rules.

4. Mismatch in Net ITC Calculation:
The court observed that there was a mismatch of Rs.5,18,230/- between the net ITC amount reflected in RFD-01 and the statement submitted by the petitioner. The court directed that the balance amount, excluding Rs.5,18,230/-, should be refunded to the petitioner pending final adjudication of the disputed amount.

Conclusion:
The court directed the opposite parties to refund the balance amount, excluding Rs.5,18,230/-, to the petitioner. The writ petition was disposed of with no order as to costs.