Input tax credit refund cannot be denied on extraneous inquiries beyond the statutory scope of dealer existence verification.

Refund rejection could not be sustained where the authority went beyond Section 22(12)(db) of the West Bengal VAT Act, 2003. That provision denies input tax credit or rebate only if purchases are made from a registered dealer found not to have existed at the relevant address; it does not require the dealer or exporter to verify the existence of the seller's sellers. The authority also relied on supposed non-existence of registered dealers despite the departmental website showing their registrations as valid and operative. Those extraneous considerations could not support rejection of the refund claim, and the constitutional challenge to the provision was left open.

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Issues: Whether the refund order could be sustained when the authority relied on matters beyond the scope of Section 22(12)(db) of the West Bengal Value Added Tax Act, 2003, and whether the vires challenge to that provision required adjudication.

Analysis: Section 22(12)(db) denies input tax credit or input tax rebate only where purchases are made from a registered dealer who is found not to have existed at the relevant address. The provision does not cast on the dealer or exporter the burden of verifying the existence of the seller's sellers. The authority also proceeded on the supposed non-existence of registered dealers despite the departmental website showing their registrations as valid and operative. Those considerations were outside the scope of the statutory inquiry and could not support rejection of the refund claim. The constitutional challenge to the provision was not necessary for deciding the matter and was therefore left open.

Conclusion: The refund rejection order was unsustainable and was set aside, with the matter directed to be reconsidered afresh in accordance with law; the vires issue remained open.

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