2024 (9) TMI 1638 - HC - GST

Refund of accumulated input tax credit (ITC) - zero rated supply - Mismatch in ITC as per GSTR-2B and GSTR-3B - HELD THAT - Although the appellate authority has faulted the adjudicating authority for not carefully examining the reconciliation statement and passing a refund order to the extent of ₹12,04,443/- without sufficient discussion, the appellate authority has also not examined the question of reconciliation. There is neither any discussion nor any finding regarding the reconciliation statement furnished by the petitioner. In terms of Section 107 (11) of the CGST Act, the appellate authority is required to decide the question in issue and cannot remand the matter to the adjudicating authority. In the present case, although, the appellate authority has faulted the adjudicating authority in not addressing the question of reconciliation statement, the appellate authority has also not addressed the same. It is considered apposite to set aside the impugned order and remand the matter to the appellate authority for consideration afresh - petition disposed off by way of remand.

Summary

Issues:
Impugning order-in-appeal dated 22.01.2024, Refund of input tax credit (ITC) under CGST Act, Mismatch in ITC as per GSTR-2B and GSTR-3B, Appellate authority's faulting of adjudicating authority, Remand of matter to appellate authority.

Analysis:
The petitioner challenged the order-in-appeal dated 22.01.2024, which set aside the order-in-original dated 30.12.2022 sanctioning a refund of &8377;67,92,118/- against a demand. The reviewing authority found that a refund of &8377;12,04,443/- was wrongly sanctioned due to a mismatch in ITC as per GSTR-2B and GSTR-3B. The Revenue appealed against the order-in-original, claiming the refund should be rejected. The appellate authority faulted the adjudicating authority for not properly addressing the mismatch issues and relying on the petitioner's reconciliation statement without sufficient discussion.

The appellate authority held that the adjudicating authority erred in allowing the refund of &8377;12,04,443/- without proper verification and quantification, deeming the order erroneous and unsustainable. However, the appellate authority itself did not examine the reconciliation statement provided by the petitioner. As per Section 107 (11) of the CGST Act, the appellate authority is mandated to decide the issue and cannot remand it to the adjudicating authority. Therefore, the High Court set aside the impugned order and remanded the matter to the appellate authority for a fresh consideration, emphasizing that the parties must be given an opportunity to be heard.

In conclusion, the High Court disposed of the petition by remanding the matter to the appellate authority for a fresh decision after faulting both the adjudicating and appellate authorities for not adequately addressing the reconciliation statement and the mismatch in ITC. The judgment highlights the importance of proper verification and quantification before granting refunds under the CGST Act, ensuring a fair and thorough review process.