The Hon’ble High Court of Delhi vide its order dated 06.02.2023 in the matter of M/s Mahajan Fabrics Pvt. Ltd. Vs. Commissioner, CGST And Ors. in W.P. (C) No. 6727/2022, set aside the order passed by the appellate authority allowing the Revenues appeal as a result of which the assessees refund claim was withheld.  It was found that the foundation of revenue’s appeal is flawed as the review order on the basis of which the appeal was filed against the order sanctioning the refund, was found on erroneous finding.

The Petitioner filed the writ petition before the Hon’ble High Court challenging an order dated 30.12.2021 passed by the Joint Commissioner of Central Goods and Services Tax (Appeals-1) [Order-in-Appeal No. 445/JC/Central Tax/Appeal-I/Delhi/2021] allowing the Revenue’s appeal against an order dated 12.09.2019 (Order-in-Original) passed by the Assistant Commissioner sanctioning the refund claim of the petitioner.

Facts of the Case: –

• The petitioner filed an application for refund of CGST under Section 54 of the Central Goods and Services Tax Act, 2017 read with Rule 89(1) of the Central Goods and Services Tax Rules, 2017. The said application was allowed by the Order-in-Original dated 12.09.2019 and an amount of ₹22,32,502/- (comprising of Rs. 16,22,489 CGST & Rs. 6,10,013/- SGST) was directed to be remitted to the specified bank account of the petitioner.
• That the aforesaid order was reviewed by the Commissioner under Section 107(2) of the Act. In terms of the said provision, the Commissioner directed that the appeal be preferred to the Appellate Authority [in this case, the Joint Commissioner (Appeals).
• That the review order dated 15.03.2020 indicates that the decision to file an appeal against the order-in-original was premised on a finding that the vehicle numbers mentioned in two invoices [Invoice No. GST/19-20/174 dated 04.05.2019 (vehicle no. DL01 LY 4032) and Invoice No. GST/19-20/208 dated 11.05.2019 (vehicle no. DL01 LY 4411), which were issued by M/s Artex Overseas Pvt. Ltd., were not reflected at the e-vahan portal. Thus, the Commissioner was of the view that 126 invoices on which the refund has been sought, are in doubt and claim for refund of tax is inadmissible.
• That in pursuance of the Commissioner’s review order dated 15.03.2020, an appeal was preferred by the revenue against the order-in-original dated 12.09.2019, on the grounds mentioned in the review order.
• However, the Appellate Authority on consideration of the submissions, facts of the case & scrutiny of the invoices, found that the said vehicles in question were registered on e-vahan portal. Despite the fact that the Appellate Authority found that the two vehicles were registered on the e-vahan portal, it allowed the Revenue’s appeal on the ground that ‘the petitioner had not established that the goods had been received by providing details of other vehicles in respect of the remaining 124 invoices.’

It was submitted on the behalf of the respondents that it was incumbent upon the petitioner to produce details of all the invoices and establish the registration of all the vehicles which were used to transport the goods covered under the invoices (126 in number). It was not sufficient for the petitioner to confine itself to establishing the registration of only two vehicles on the e-vahan portal, that were used to transport the goods under the two invoices in question.  Though on being queried that which provision of the Act required the petitioner to file details of all vehicles and also establish its registration with the e-vahan portal, it was submitted that there is no such requirement but once a doubt is raised, it is incumbent on the petitioner to file the requisite details.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, and on perusal of provisions of Section 16 of CGST, found that it is clear from the explanation to Section 16(2)(b) of the Act that the person would be deemed to have received the goods if the conditions, as stated therein, are satisfied.
• That in the present matter there is no dispute that the petitioner had filed its return disclosing all necessary details for claiming the refund and accordingly, the refund claim was sanctioned vide order-in-original 12.09.2019.
• It was noted by the Hon’ble Court that in the review order dated 15.03.2020 few invoices were picked up for scrutiny. Out of the said invoices, it was found that the vehicles mentioned in two invoices were not registered on the e-vahan portal. And it is on the basis of this finding that the decision to file an appeal was taken by the Commissioner of Tax with an assumption that the refund claims made by the petitioner were dubious, solely on the basis of the aforesaid finding.
• However, the Appellate Authority later, on consideration of the appeal filed by the revenue, found the said finding incorrect, as is apparent from the impugned order. Thus, the review order dated 15.03.2020 to file an appeal against the Order-in-Original is founded on an erroneous finding. Having accepted the same, the Appellate Authority was required to reject the Revenue’s appeal outrightly.
• It was found by the Hon’ble Court that when the foundation of the Revenue’s appeal is flawed, the petitioner was not required to do anything more. Further, the Appellate Authority did not find any flaw in the details as furnished by the petitioner. There is neither any tangible reason to doubt the particulars, as stated in the invoices, nor any finding that the same are untrue.

The Hon’ble Court with the above findings, allowed the petition by setting aside the impugned order dated 30.12.2021.  The respondents are directed to disburse the amount of refund sanctioned by the Assistant Commissioner in terms of the Order-in-Original dated 12.09.2019.