TaxTMI 
TaxTMI 
2026 (7) TMI 985
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.... credit for the tax period from July 2019 to September 2019, claiming a refund of Rs. 6,49,667/-. Pursuant thereto, the Assistant Commissioner, Janakpur Division, issued a Show Cause Notice proposing rejection of the refund claim to the extent of Rs. 3,44,469/-, to which the Petitioner submitted a detailed reply. 3. Upon consideration thereof, the Assistant Commissioner, Janakpuri, vide Order-in-Original (OIO) dated 08.10.2021, partially sanctioned the refund to the extent of Rs. 3,05,198/- and rejected the balance amount of Rs. 3,44,469/ -. Aggrieved thereby, the Petitioner preferred an appeal before the Appellate Authority, which, vide OIA dated 27.09.2025, set aside the OIO. Thereafter, the Petitioner's refund application in respect of the aforesaid amount was once again rejected by way of the Impugned Order. Aggrieved thereby, the Petitioner has approached this Court. 4. Learned counsel representing the Petitioner claims that the OIA dated 27.09.2025 finalized the issue pertaining to refund and as such the Petitioner is required to be refunded an amount of Rs. 3,44,469/- along with the statutory interest thereon. He submits that the Petitioner cannot be relegated to....
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....f tax periods in which under-reporting and subsequent rectification occurred. Therefore, independent verification of the factual correlation between GSTR-1 and GSTR-3B remains necessary for sanction of refund under Rule 92 of the CGST Rules, 2017. In this regard, as per para 8.2 above, taxpayer has furnished certain month-wise details indicating the period during which short/excess reporting allegedly occurred and has stated that rectification was reflected in GSTR-3B of August 2019. 10.1 In view of the above and upon perusal of the GSTR-1 and GSTR-3B returns pertaining to the relevant months wherein the export turnover was allegedly short reported and the local turnover was reported in excess, the details as observed from the scrutiny of the said returns are as under- GSTR-1 Returns Months B2B SALE and B2C/B2C(L) SALE EXPORT SALE TOTAL SALE April'2018 1,12,95,955 33,35,280 1,05,62,320 July'2018 60,24,875 20,87,370 81,12,245 September'2018 80,36,730 11,42,600 91,79,330 Feburary'2019 95,22,115 17,21,340 1,12,43,455 August'2019 91,53,590.60 13,20,970 1,04,74,560.60 GSTR-3B Returns Mont....
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.... and the consolidated figures reported in GSTR-3B by the taxpayer. The Appellate Authority noted that, for the Financial Year 2018-19, a total difference in turnover amounting to Rs.30,23,530/- was reflected and that the same was subsequently adjusted through amendments reported in GSTR-9 for the Financial Year 2019-20. Accordingly, the Appellate Authority concluded that, after giving effect to the said adjustment, no discrepancy remained in the adjusted total turnover on account of the amendment. In view of the above facts and upon examination of the records, it is observed that the taxpayer has been consistently filing refund applications under the inverted duty structure since the implementation of the GST regime. As per Rule 89(4) of the CGST Rules, 2017, the maximum refund amount is determined by the following formula: Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services x Net ITC + Adjusted Total Turnover)} - Tax payable on such inverted rated supply of goods and services. From the above formula, it is evident that the Adjusted Total Turnover forms part of the denominator and directly impacts the quantum of refund admissible. Any....
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....the taxpayer, it has been observed that the tax liability pertaining to one B2C supply of March 2023 was duly discharged in the same month and that only the reporting of the said supply in GSTR-1 was done in April 2023, resulting in a timing difference. On verification of the tax liability report (Table-1) generated from the GST Portal, it is observed that the tax has already been paid and, in fact, an excess payment of Rs. 9,919.04/- exists. Since GSTR-3B is the return for discharge of tax liability and the discrepancy has arisen only due to delayed reporting in GSTR-1, the alleged short payment is merely apparent in nature. Accordingly, the taxpayer's explanation is found to be satisfactory and no short payment of tax is established. 14. In view of the foregoing facts, scrutiny of statutory returns, and the findings recorded hereinabove, it is observed that the discrepancies in reporting of turnover between GSTR-1, GSTR-3B, and annual returns have a direct bearing on the computation of refund under Section 54 of the CGST Act, 2017 read with Rule 89(4) of the CGST Rules, 2017. Since the refund under the inverted duty structure is formula-based and the Adjusted Total Turno....