Service Performance Dispute Resolved: Partial Refund Claim Upheld with Directive for Comprehensive Verification of Intercompany Agreement

HC allowed partial refund claim, remanding case for fresh determination of service rendering in December 2017. The court directed respondent to re-examine refund application, specifically focusing on verification of actual service performance under Intercompany Master Services Agreement. Impugned orders were set aside with instruction to maintain previously granted benefits to assessee.

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Issues involved:
The petitioner seeks a declaration that the impugned order affirming the rejection of refunds related to service activity is illegal and requests the quashing of said orders.

Details of the judgment:
The petitioner had entered into an Intercompany Master Services Agreement to provide services to a company outside India, with the agreement providing for remuneration of costs incurred for services rendered. The petitioner claimed zero-rated supply of services under the IGST Act and asserted entitlement to claim refund of Input Tax Credit. Invoices missed in GST returns were later reported, with interest paid for the delay. The petitioner applied for a refund of Rs.66,68,794, which was partially rejected on grounds of being adjustment bills, not related to service activity.

The petitioner's appeal against the rejection of the refund was also dismissed, with the respondent contending that clarity was needed on whether services were actually rendered during the relevant period. The matter was remitted for fresh adjudication to determine if services were rendered in December 2017, considering the Intercompany Master Services Agreement. The impugned orders were set aside, with a specific direction to record findings on the rendering of services in December 2017.

The remand was made with a directive to not retract any benefit previously granted to the assessee during earlier proceedings. The petition was disposed of accordingly.

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