Landmark GST Refund Case: Petitioner Wins Challenge, Gains Opportunity to Resubmit Documents Under Section 54

HC allowed petitioner's challenge to GST refund rejection. Court found respondent's refusal non-compliant with Section 54 of GST law. Order set aside and matter remanded for reconsideration, with petitioner granted opportunity to submit additional documents within three weeks. Respondent directed to issue fresh decision within two months, without imposing costs.

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Issues involved: Challenge to rejection of application for refund of unutilised input tax credit.

Summary:
The petitioner, engaged in manufacturing and supplying cotton yarn, sought a refund of unutilised input tax credit due to higher tax rates on inputs than outputs. The refund application was rejected citing mismatch in inverted turnover with GSTR returns. Petitioner argued submission of all relevant documents and non-compliance with Circular No.135/05/2020 - GST. Respondent claimed petitioner's failure to respond to rejection notice led to the refund application rejection. The court found the rejection inadequate as it did not comply with Section 54 of GST enactments and related rules. The order was set aside, and the matter remanded for reconsideration. Petitioner allowed to submit additional documents within three weeks for a fresh decision within two months. Writ petition disposed of with no costs incurred.

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