2023 (11) TMI 242 - HC - GST

Withholding of Refund of accumulated Input Tax Credit - Denial on the ground that petitioner s turnover for the relevant period (May, 2022 to June, 2022) was less than the refund claimed and that the petitioner had availed an excess ITC during the Financial Year 2021-22 - HELD THAT - Concededly, there is no order staying the operation of the order-in-appeal dated 19.06.2023 - It cannot be accepted that the respondents can withhold the refund due to the petitioner on the ground as stated. Accordingly, the respondents are directed to forthwith process the petitioner s claim for refund in compliance with the order-in-appeal dated 19.06.2023 along with applicable interest, in accordance with law, within a period of three weeks from today.

Summary

Issues Involved:
The issues involved in this case are the incorrect cause title of the petition, denial of refund claim by the authorities, appeal against the order-in-original, non-processing of refund despite appellate authority's decision, and the withholding of refund by the respondents pending a decision on further action.

Incorrect Cause Title:
The respondents pointed out an error in the cause title of the petition, where it was filed in the name of the Director instead of the company. The petitioner acknowledged the typographical error and agreed to correct the memo of parties, ensuring the correct representation in all documents.

Denial of Refund Claim:
The petitioner filed a claim for refund of accumulated Input Tax Credit (ITC) amounting to Rs. 1,14,14,405/- for goods exported without tax payment. The claim was initially denied based on the grounds of turnover being less than the claimed refund and excess ITC availed in the previous financial year due to a mismatch in returns. An appeal under Section 107 of the CGST Act was filed against this denial.

Non-Processing of Refund:
Although the petitioner succeeded in the appeal and the Appellate Authority directed the respondents to refund Rs. 1,13,09,772/-, the refund was not processed by the authorities. The respondents cited pending decisions on reviewing the appeal order or filing further appeals as reasons for the delay in processing the refund.

Withholding of Refund:
The respondents had not taken a decision on whether to review the appeal order or file an appeal against it, leading to the withholding of the refund due to the petitioner. The Court held that in the absence of any stay order on the appeal decision, the respondents could not withhold the refund. They directed the authorities to process the refund along with applicable interest within three weeks while allowing them to pursue legal remedies against the appeal order.