Court directs petitioner to pursue statutory appeal under Section 107 of CGST Act, 2017 after refund rejection on new grounds
In a significant judgment, the Delhi High Court has dismissed the writ petition filed by M/s Karamsar Poultry Appliances, challenging the rejection of their refund claim by the Assistant Commissioner, Janakpuri Division, CGST Delhi West. The petitioner had sought the refund of Rs. 3,44,469/- as unutilized Input Tax Credit (ITC) following an appellate authority's decision to set aside a previous rejection. However, the Assistant Commissioner refused the refund, citing fresh grounds.
The court, presided by Justices Anil Kshetarpal and Shail Jain, emphasized the Assistant Commissioner's authority to re-evaluate the refund claim on different grounds from those considered by the appellate authority. The decision highlights the importance of the statutory remedy of appeal under Section 107 of the CGST Act, 2017, allowing for a comprehensive examination of the merits of the reasons for refund rejection.
The judgment also provides relief for the petitioner concerning the limitation period. The court acknowledged the time spent in pursuing the writ petition and allowed the petitioner to seek exclusion of this duration while filing an appeal.
The case originated from the petitioner's application for a refund of Rs. 6,49,667/- for the tax period July 2019 to September 2019. Although partially sanctioned initially, the appellate authority had set aside the rejection of the balance amount. The subsequent rejection by the Assistant Commissioner led the petitioner to approach the High Court, arguing that the appellate decision had attained finality.
The High Court, while dismissing the writ petition, clarified that the Assistant Commissioner's fresh grounds for rejection necessitate an appeal to assess their legality and correctness comprehensively. The court's refusal to exercise writ jurisdiction underscores the procedural aspect of pursuing statutory remedies before judicial intervention.
Bottom line:-
Goods and Services Tax (GST) - Refund of unutilized Input Tax Credit (ITC) - Writ jurisdiction - Petitioner denied refund despite appellate authority setting aside earlier rejection - High Court held that the Assistant Commissioner was not precluded from re-examining the refund claim on fresh grounds distinct from those addressed by the appellate authority - Petitioner directed to avail statutory remedy of appeal under Section 107 of CGST Act, 2017.
Statutory provision(s): Goods and Services Tax Act, 2017, Section 107
