LI Network
Published on: October 15, 2023 at 11:40 IST
The Delhi High Court has directed a fresh evaluation of a GST refund claim, highlighting the fact that the authority failed to request the taxpayer to submit the required documents.
A division bench consisting of Justice Vibhu Bakhru and Justice Amit Mahajan made this decision. The case involved the petitioner, Saurabh Aggarwal, the proprietor of M/s Aarav Plastics, who had applied for a refund of Rs. 2,42,846 due to an inverted duty structure.
The adjudicating authority had issued a show cause notice proposing to reject the refund application for two reasons. Firstly, there was a discrepancy in the reported turnover for the relevant period. Secondly, the petitioner’s claim was related to Input Tax Credit (ITC) for goods classified under HSN 6404 (ready footwear), which were also the petitioner’s outward supplies, potentially negating the existence of an inverted duty structure.
In response to the show cause notice, the petitioner provided supporting documents. However, the application was ultimately rejected due to the petitioner’s failure to submit the required documents. Subsequently, the petitioner appealed the rejection order to the appellate authority, but the appeal was dismissed on the grounds that the petitioner had not submitted copies of the statutory records (GSTR-1, GSTR-3B, and GSTR-2A) for the relevant period, which were necessary to corroborate the claim.
The Delhi High Court noted that there was no dispute regarding the fact that the petitioner was not asked to provide these documents. Consequently, the court decided to remand the case to the appellate authority for a fresh evaluation.
The appellate authority was instructed to issue a notice to the petitioner, requesting all necessary documents for the processing of the refund claim. The petitioner was also directed to provide any required documents, including copies of statutory returns, as deemed necessary by the appellate authority to substantiate the refund claim.
