inverted duty refund rejected as itc claimed cancelled dealers in past period

[satbir singhwahi]

Sir Inverted duty refund rejected on two grounds 1.claimant availed ITC from the cancelled/suspended suppliers but no bill in current period of refund filed. 2.person violates the provision of rule 86B, no violation as paying Income tax 9 to 10 lacs each year. Kindly guide to file file appeal with case laws 

AI Summary

Refund denial unsustainable: Section 54(3)/Rule 89(5) ties refund to closing ITC; Sections 73/74 adjudication required; assess Rule 86B. Taxpayer's inverted duty refund was rejected because ITC originated from suppliers later cancelled and for alleged Rule 86B violation. Legal responses note that refund under Section 54(3)/Rule 89(5) is determined by closing ITC relatable to supplies in the refund period, and subsequent supplier cancellation does not automatically invalidate ITC availed when the supplier was valid. Refund denial must follow separate adjudication under Sections 73/74 before disallowing ITC; administrative refusal without such proceedings is unsustainable. Rule 86B applicability should be examined factually; appellate remedy lies in filing a refund appeal with supporting precedents.