Petitioner gets partial Input Tax Credit refund under inverted tax structure, balance amount pending proper documentation

Orissa HC partially allowed petitioner's refund claim for Input Tax Credit under inverted tax structure. Petitioner failed to submit input-wise details of spare parts used in e-vehicle manufacturing despite show-cause notice. Authority properly rejected refund application due to incomplete documentation. Court directed refund of balance amount Rs.2,17,78,998/- excluding disputed Rs.5,18,230/- pending final adjudication with proper documentation. Petition disposed of with partial relief granted.

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Issues Involved:

1. Rejection of Refund Application
2. Alternative Remedy
3. Compliance with Statutory Provisions and Submission of Documents
4. Mismatch in Net ITC Calculation

Summary:

1. Rejection of Refund Application:
The petitioner sought to quash the order dated 02.08.2022, which rejected their refund application for the period from December 2021 to January 2022. The petitioner claimed a refund due to accumulated Input Tax Credit (ITC) from an Inverted Tax Structure. Despite submitting all required documents, the refund was denied on the grounds that the petitioner failed to submit the entire books of account for the concerned period, making it impossible to determine the refund amount without proper verification.

2. Alternative Remedy:
The Additional Standing Counsel for the CT & GST Department argued that the petitioner should have availed the alternative remedy under Section-107 of the OGST & CGST Act instead of directly approaching the High Court. The counsel cited the case of Commissioner of Income Tax v. Chhabil Das Agarwal to support this contention.

3. Compliance with Statutory Provisions and Submission of Documents:
The court examined the relevant provisions of the OGST Act, CGST Rules, and CBIC Circular No.125/44/2019-GST. It was noted that the petitioner had adhered to the statutory requirements for claiming a refund. The court found that the rejection of the refund application was not justified as the petitioner had submitted all necessary documents, including Statement-1 and Statement-1A, as per Rule-89(5) of the CGST Rules.

4. Mismatch in Net ITC Calculation:
The court observed that there was a mismatch of Rs.5,18,230/- between the net ITC amount reflected in RFD-01 and the statement submitted by the petitioner. The court directed that the balance amount, excluding Rs.5,18,230/-, should be refunded to the petitioner pending final adjudication of the disputed amount.

Conclusion:
The court directed the opposite parties to refund the balance amount, excluding Rs.5,18,230/-, to the petitioner. The writ petition was disposed of with no order as to costs.

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