Allegation of fake credit availment by supplier cannot be ground to reject refund application

Balaji Exim Vs Commissioner, CGST And Ors. (Delhi High Court)

Delhi High Court held that rejection of refund application on allegation of fake credit availed by the supplier is unsustainable in absence of any establishment of non-supply of goods from the said supplier.

Facts- The petitioner had filed its refund application dated 11.09.2020 (in Form – GST-RFD – 01) seeking refund of the unutilized Input Tax Credit. The petitioner also filed another refund application dated 12.09.2020 (in Form GST-RFD – 01). The refund sought was in respect of goods exported by the petitioner.

Respondent no.2 issued an acknowledgment (in Form GST­RFD-02) dated 27.09.2020, in respect of the petitioner’s refund application dated 12.09.2020. In respect of the first application dated 11.09.2020, respondent no.2 issued a deficiency memo dated 21.09.2020, inter alia, stating that the supporting documents were not uploaded on the GST portal. Accordingly, the petitioner filed another application dated 23.09.2020 along with all documents in support of its refund application. The same was acknowledged by the respondent on 01.10.2020.

The petitioner’s applications were not processed as the supplier from whom the petitioner had purchased the goods had allegedly received fake invoices from its suppliers.

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