The Delhi High Court in M/S Mahajan Fabrics Pvt Ltd Vs Commissioner CGST and others [W.P.(C) 6727/2022 with Neutral Citation Number 2023/DHC/000976 decided on 06.02.2023], held the refund claim cannot be denied merely on the suspicion that the vehicles used for transportation of goods stated in the invoices are not registered on the e-vahan portal.
M/s. Mahajan Fabrics Pvt. Ltd. (hereinafter referred to as the “Petitioner”) had filed for an application of refund under Section 54 of the Central Goods and Services Act, 2017 (hereinafter referred to as the “CGST Act”) read with Rule 89(1) of the Central Goods and Services Tax Rules, 2017(hereinafter referred to the “CGST Rules”). The Refund Application was allowed vide Order dated 12.09.2019 and an amount of Rs.22,32,502/- was directed to be remitted comprised of Rs. 16,22,489/- as CGST and Rs.6,10,013/- as SGST.
The Order was reviewed under Section 107(2) of the CGST Act by the Commissioner of CGST (hereinafter referred to as the “Respondent”) and directed to refer an appeal before the Joint Commissioner (Appeals) (hereinafter referred to as the “Appellate Authority”). The Respondent directed to prefer an appeal vide Review Order dated 15.03.2020, because certain invoices on which the refund was claimed were dubious. The vehicles mentioned in the invoices were not found to be registered on e-vahan portal and the details were unreliable.
The Appellate Authority vide Order dated 30.12.2021 (hereinafter referred to as the “Impugned Order”) held that the vehicles were registered on the e-vahan portal, but allowed the appeal as the Petitioner had not established that the goods were received based on the details provided in the remaining invoices.
Hence, aggrieved by the Impugned Order, the Petitioner has filed the present Petition.
ISSUE BEFORE THE HIGH COURT
CONTENTIONS OF THE PARTIES
The Respondents submitted that it is incumbent on the Petitioner to prove that the vehicles used for transportation of the goods of the invoices on which the refund was claimed, were registered on the e-vahan portal.
DECISION AND FINDINGS
The Delhi High Court observed that the Petitioner had filed the Refund Application along with necessary documents for disclosing the transactions. Moreover, the refund was also granted vide Order dated 12.09.2019. Moreover, the Respondent directed for appeal on the sole finding that two vehicles used for transportation were not registered on e-vahan portal.
It was also observed that the Appellate Authority did not find any shortcomings in the Refund Application filed by the Petitioner. Moreover, the vehicles used for transportation were registered on the e-vahan portal.
The Court allowed the Petition and set aside the Impugned Order and directed the Respondents to disburse the Refund claim in accordance to Order dated 12.09.2019.
The Delhi High Court has upheld the intent of legislation that is to promote ease of doing business. The refund claim cannot be denied based on a mere suspicion. Moreover, when the legislation does not provide for the details of registration vehicles by which the goods are transported, it cannot be demanded from the Petitioner. The Authorities cannot exceed the provisions of legislation. Thus, the refund claim cannot be denied unless a conclusive proof of unauthorized and illegal transactions prevails.
– Team AMLEGALS, assisted by Ms. Samiha Yadav (Intern)
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