Mittal Footcare Vs Commissioner of Central Goods And Services Tax And Anr. (Delhi High Court)
Introduction: In a recent development, the Delhi High Court addressed a crucial issue related to Goods and Services Tax (GST) Input Tax Credit (ITC) refunds. The case involves Mittal Footcare challenging the dismissal of their refund application for the period April 2021 to March 2022. The order-in-original, dated 10.10.2022, and the subsequent dismissal of appeal on 29.08.2023 are contested by the petitioner.
Detailed Analysis: The primary ground for the rejection of the refund application was cited as a mismatch of turnover, excess availment, and misdeclaration of invoice value. The order-in-original stated that the petitioner failed to provide supporting documents, and a personal hearing was allegedly granted, contrary to the petitioner’s claim.
Mittal Footcare asserted that relevant documents were uploaded in response to the show cause notice, disputing the system’s failure to register them. The appellate authority, however, recorded that no documents were submitted, leading to a discrepancy in the records.
The court noted a misinterpretation by the appellate authority, acknowledging the petitioner’s claim of technical glitches preventing the registration of uploaded documents. It emphasized that the defect of an unauthenticated document (Annexure B) could have been rectified with a certification request or by producing additional material during the appeal.
The critical observation made by the court was that a refund application cannot be rejected solely on the grounds of non-submission of authenticated documents. It emphasized the department’s right to seek further clarification or necessary documents to validate refund claims.
Conclusion: The Delhi High Court, considering the limitations period under Section 54 (1) of the Central Goods and Service Tax Act, 2017, set aside the order-in-original and the appeal dismissal. The case is remitted to the adjudicating authority for reevaluation, instructing them to consider the documents filed by Mittal Footcare in support of the refund application. The authority is directed to conclude the re-adjudication preferably within eight weeks and request additional documents if necessary.
This ruling reinforces the principle that procedural defects, especially non-submission of authenticated documents, should not be a sole reason for rejecting GST ITC refund claims. The decision underscores the importance of fair consideration and the opportunity for rectification in such matters.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Petitioner impugns order dated 29.08.202 1, whereby the appeal filed by the petitioner against order-in-original dated 10.10.2022 has been dismissed. The order-in-original rejected the application of the petitioner seeking refund on the Input Tax Credit for the period April, 2021 to March, 2022.
2. Issue Notice. Notice is accepted by learned counsel appearing for the respondents.
3. With the consent of parties, the petition is taken up for hearing and disposal.
4. The order-in-original rejected the application seeking refund primarily on the ground that there was a mismatch of turnover, excess availment and misdeclaration of invoice value and no supporting documents to disprove the said contention were supplied in response to the show cause notice.
5. As per the petitioner, the order-in-original erroneously records that a personal hearing was granted to the petitioner, however, no personal hearing was granted. It is further contended in the appeal that the petitioner had uploaded the relevant documents in response to the show cause notice, however, the order records that documents had not been submitted. Petitioners have in the grounds of appeal specifically taken a plea that there appears to be a technical glitch in the system of the respondents and petitioner had uploaded the documents.
6. The order-in-original records that the documents submitted by the petitioner have been considered, however, proceeds on the premise that the petitioner has not submitted any documentary evidence to substantiate the submission about technical error and has not submitted any documents before the appellate authority, which were submitted alongwith the reply to the show cause notice.
7. In our view, the appellate authority appears to have misconstrued the submission of the petitioner. Case of the petitioner is that petitioner had uploaded documents, however, the system did not register the documents which were uploaded from the end of the petitioner. The appellate authority records that petitioner had not submitted any documents which were submitted alongwith the reply.
8. From the record of the respondents, it appears that documents were not uploaded. Since documents were not uploaded, there could be no document which the petitioner could file in the appeal which had been submitted alongwith the show cause notice.
9. The order-in-original also records that petitioner had placed before the appellate authority an Annexure B, which contained all the requisite information, however, Annexure B has been disregarded on the ground that the same has not been signed or authenticated. Annexure B is an annexure to the appeal and in case the appellate authority was of the view that an unauthenticated document had been filed, the same was a curable defect and petitioner could have been called upon by the appellate authority to certify the said document or produce further material in the form of vouchers, bill etc. to substantiate the said document.
10. A refund cannot be rejected merely on the ground of non-supply of authenticated document. In case party is entitled to refund, it is open to the Department to call for further clarification or documents as may be required to satisfy itself that refund is due and payable.
11. In the instant case, we notice that petitioner seeks a refund of Input Tax Credit and contends that relevant documents are available with the petitioner.
12. Reference may also be had to Section 54 (1) of the Central Goods and Service Tax Act, 2017, which provides for a period of two years from the relevant date to make an application seeking refund. The relevant period in issue is April, 2021 to March, 2022 and as such, the application of the petitioner even today is within the limitation prescribed under Section 54 (1) of the said Act.
13. In view of the above, we are of the view that the matter needs to be relegated to the concerned authority to re-adjudicate the application of the petitioner by taking into account the documents filed by the petitioner in support of his application for refund. Accordingly, the order-in-original dated 10.10.2022 and order in appeal dated 29.08.2023 are set aside. The matter is remitted to the adjudicating authority to re-adjudicate the application by taking into account the relevant documents available with the petitioner in support of the application for refund, preferably within a period of eight weeks from today. In case the authority requires any further document, it would be open to the authority to call upon the petitioner to furnish additional documents.
14. The writ petition is disposed of in the above terms.
15. Dasti under signature of the Court Master.
