Taxpayer’s Request For Fresh Evaluation Of GST Refund Claim Merits Acceptance As He Was Not Asked To Furnish Requisite Documents: Delhi HC

The Delhi High Court has remanded a case to the appellate authority for a fresh evaluation of a refund claim, citing the authority's failure to request the petitioner (taxpayer) to provide all necessary documentation.

The Division bench comprising of Justice Vibhu Bakhru and Justice Amit Mahajan observed that “The petitioner appealed the order dated 31.05.2022 before the appellate authority. However, the petitioner’s appeal was rejected on the ground that the petitioner had not submitted the copies of the statutory records (GSTR-1, GSTR-3B and GSTR-2A) for the relevant period and therefore, the petitioner’s claim could not be co-related”.

“It is not disputed that the petitioner was not asked to furnish the said documents. It is also the petitioner’s case that the statutory records were available on its portal with the concerned authorities”, added the Bench.

Advocate Vineet Bhatia appeared for the Petitioner, whereas Advocate Neha Malik appeared for the Respondent.

The brief facts of the case were that, one Saurabh Aggarwal, Proprietor of M/s Aarav Plastics (petitioner), had initially 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 application for two reasons. First, there was a discrepancy in the reported turnover for the relevant period. Second, the petitioner's claim was for Input Tax Credit (ITC) related to goods classified under HSN 6404 (ready footwear), which also constituted 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 but the application was ultimately rejected, citing 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, making it impossible to corroborate the claim.

After considering the submission, the Bench observed that there was no dispute that the petitioner had not been requested to provide these documents, and therefore, deemed it appropriate to remand the case to the appellate authority for a fresh evaluation.

The High Court accordingly ordered the appellate authority to issue a notice requesting the petitioner to provide all documents deemed necessary for the processing of the refund claims.

The High Court also instructed the petitioner to submit any required documents, including copies of its statutory returns, as deemed necessary by the appellate authority to corroborate the refund claim.

Cause Title: Saurabh Aggarwal Proprietor of M/s Aarav Plastics v. Commissioner, CGST Delhi North and Ors. [Neutral Citation: 2023: DHC: 7280-DB]

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