IGST refund claimed on export sales, based on refundable ledger evidence, sent back for limited tax officer verification

The dominant issue was whether an addition could be sustained in respect of an IGST refund claimed on export sales. Since the taxpayer produced, for the first time before the Tribunal, an IGST refundable ledger for a specific period, the claim required factual verification at the assessment stage. Applying principles of natural justice and proper fact-finding, the Tribunal held that the material should be examined by the Jurisdictional AO to verify the ledger and assess the refund claim in accordance with law. The addition issue was remitted to the AO for limited verification, with the appeal allowed for statistical purposes.

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1. ISSUES PRESENTED AND CONSIDERED

1) Whether the addition sustained in respect of the balance IGST refund claimed on export sales could be conclusively adjudicated on the existing record, or whether the claim required factual verification in light of additional evidence produced before the Tribunal.

2) Whether the Tribunal should admit and act upon the "IGST Refundable Ledger" produced for the first time before it, and if so, the appropriate course (final relief vs. remand) consistent with principles of natural justice and verification of primary records.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Treatment of IGST refund claimed on export sales-need for factual verification vs. final adjudication

Legal framework (as discussed in the judgment): The Court considered the controversy arising from adjustments made while processing the return under section 143(1) and the subsequent rectification proceedings under section 154, followed by appellate proceedings under section 250. The Tribunal confined itself to the limited adjudicatory requirement arising from the claim and the evidentiary record placed before it.

Interpretation and reasoning: The Court identified the "core issue" as the addition relating to IGST refund claimed on export sales. It noted that the assessee produced, for the first time before the Tribunal, an "IGST Refundable Ledger" covering a specified period, which purportedly reflected refund entries and the accounting treatment of IGST paid and refunds claimed/received. Since this material had not been examined by the assessing authority and required factual verification, the Court held that the issue could not be conclusively decided at the Tribunal stage without verification of the ledger and examination of the claim on facts.

Conclusion: The Court did not affirm or delete the sustained IGST-related addition on merits; instead, it set aside the matter to the Jurisdictional Assessing Officer for limited verification of the IGST refundable ledger and for examination of the assessee's claim in accordance with law, with an opportunity of being heard to the assessee.

Issue 2: Additional evidence (IGST Refundable Ledger) produced before the Tribunal-appropriate relief and procedure

Legal framework (as discussed in the judgment): The Court proceeded on the basis that additional evidence was placed before it and that such evidence necessitated factual verification by the assessing authority. The Court applied the requirement of providing a reasonable opportunity of hearing and ensuring verification of primary records before a decision is taken.

Interpretation and reasoning: The Court accepted that the newly produced IGST refundable ledger was relevant to the disputed addition, but emphasized that it "requires factual verification." To balance fairness and accuracy, the Court found it appropriate, "in the interest of justice," to restore the matter for limited verification rather than decide finally on the basis of unverified material. It further directed that the assessing authority must provide reasonable opportunity to the assessee and that the assessee must cooperate to enable expeditious disposal.

Conclusion: The Court remanded the IGST refund issue to the assessing authority for limited verification and fresh consideration in accordance with law. The appeal was allowed for statistical purposes on this remand basis.

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