Phoenix Impex Vs Sales Tax Officer (Delhi High Court)
The Delhi High Court considered a writ petition seeking refund of ₹25,16,760 claimed as unutilised Input Tax Credit (ITC) for November 2023. The petitioner had filed the refund application on 15 January 2024, alleging non-processing despite timelines prescribed under Section 54 of the CGST Act, including Section 54(7). During the pendency of the petition, the tax department issued a Show Cause Notice on 21 August 2025, stating that the refund was held up because the supplier had allegedly not remitted tax through cash and had utilised over 90% ITC to discharge tax liability, and sought supporting documents. The petitioner contended that there is no bar on utilisation of ITC beyond 90% under Rule 86B of the CGST Rules.
The Court directed the department to grant a personal hearing, consider the petitioner’s replies and legal issues, and pass a reasoned order. Subsequently, on 19 September 2025, the refund order was passed sanctioning the full refund amount of ₹25,16,760, but it was silent on interest. In view of the refund having been sanctioned, the Court directed that the refund amount be credited along with applicable statutory interest, in accordance with law, within one month. The petition was disposed of accordingly.
