Facts of the Case

The petitioner filed an application seeking refund of CGST under Section 54 read with Rule 89(1) of the CGST Rules. The refund amount of ₹22,32,502/- was sanctioned by the Assistant Commissioner through an Order-in-Original dated 12.09.2019.

Subsequently, the Commissioner exercised powers under Section 107(2) and directed filing of an appeal against the refund order. The review was based on a finding that vehicle numbers mentioned in two invoices were not reflected on the e-vahan portal, leading to a presumption that all 126 invoices were dubious.

The Appellate Authority accepted that the two vehicles were actually registered but still allowed the Revenue’s appeal on the ground that the petitioner failed to establish receipt of goods for the remaining invoices.

Issues Involved

  1. Whether refund of GST can be denied based on suspicion arising from discrepancies in a few invoices.
  2. Whether the petitioner is required to provide details of all transport vehicles for all invoices.
  3. Whether compliance with Section 16 CGST Act was satisfied for claiming Input Tax Credit.

Petitioner’s Arguments

  • The petitioner had complied with all statutory requirements and furnished necessary returns and documents.
  • Refund was already sanctioned after proper verification.
  • The entire case of the Revenue was based on incorrect assumptions regarding only two invoices.
  • There is no statutory requirement to furnish vehicle details for all invoices under the CGST Act. 

Respondent’s Arguments

  • The petitioner failed to establish actual receipt of goods for all invoices.
  • Once doubt arose regarding certain invoices, the burden shifted to the petitioner to prove genuineness of all transactions.
  • Mere filing of returns and documents is insufficient to prove eligibility for ITC refund. 

Court’s Findings / Order

  • The Court held that the review order was based on an erroneous factual premise, as the vehicles in question were indeed registered.
  • Once the very foundation of the Revenue’s appeal was incorrect, the appeal itself could not sustain.
  • There was no provision under the Act requiring submission of vehicle details for all invoices.
  • The petitioner had already complied with statutory requirements and there was no material to doubt the transactions.
  • The Appellate Authority erred in shifting the burden on the petitioner without valid grounds.

Final Order

  • The writ petition was allowed.
  • The impugned appellate order dated 30.12.2021 was set aside.
  • The respondents were directed to disburse the refund amount as originally sanctioned.

Important Clarification by the Court

  • Refund or ITC cannot be denied merely on suspicion or assumptions.
  • The burden cannot be arbitrarily shifted to the taxpayer without statutory backing.
  • Once the basis of review is found incorrect, further inquiry is unwarranted.
  • Section 16 compliance does not require furnishing transport vehicle verification unless specifically mandated.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/59506022023CW67272022_174546.pdf

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