The allegations of claiming the bogus credit could not be the basis for refusing the applications for the refund held by the Delhi High court until the same would be accomplished that the applicant does not obtain the goods or paid for them.
The applicant is qualified for the GST ITC refund on the goods which would get exported through it seen by the division bench of Justice Vibhu Bakhru and Justice Amit Mahajan. The applicant’s refund application for ITC along with cess has been processed by the respondents, they stated.
The applicant had furnished its refund application asking for the refund of the unused ITC that stands at Rs. 72,03,961, which consists of Integrated Goods and Service Tax (IGST) and Cess. The applicant furnished another refund application that claims an ITC refund comprised of IGST and Cess amounting. The refund asked was for the goods exported through the applicant.
The respondent allocated an acknowledgement (in Form GST- RFD-02) on 27.09.2020, for the refund application of the applicant. For the first application on 11.09.2020, the respondent furnished a deficiency memo expressing that the supporting documents were not uploaded on the GST portal. The petitioner furnished another application on 23.09.2020 including all documents in support of its refund application. Respondent considered it on 01.10.2020.
The application of the applicant was not processed since the supplier via whom the applicant did not purchase the goods would have allegedly obtained the bogus invoices through its suppliers.
The officers of Central GST, Anti Evasion Branch, Delhi West Commissionerate performed the search on the premises of the applicant dated 21.10.2020. The applicant (its proprietor) was summoned to the office of the respondent on 23.10.2020 to tender some documents.
Important: Fraudsters’ Mind vs Govt Intelligence for Fake GST Invoices
Numerous letters were written by the applicant to the respondent urging for the early disposal of the refund applications. But the applicant’s request did not acknowledge.
While the applicant was conscious of the allegations about the issued fake invoices supplied by his supplier, its ITC was intercepted. The supplier had moved the High Court of Calcutta by filing a writ petition asking to unblock its Electronic Credit Ledger (ECL).
On the date 04.06.2021, a Show cause notice was allocated through the respondent to the applicant asking to deny the refund applications of the applicant. The show cause notice showed that the respondent asked for a report on the legality and genuineness of the export of goods from the Customs Station, Kolkata, which were bought through the applicant via M/s Shruti Exports (proprietor Sh. Vijander Kumar Goel). Answering the said query, respondent no.2 had obtained data that the said supplier, M/s Shruti Exports was being analyzed via DGGI in association with bogus invoices which has been issued allegedly through it. It was alleged that M/s Shruti Exports had claimed the CGST and SGST – and Cess on the grounds of bogus invoices issued by particular persons.
Answering the show cause notice the applicant stated. Through the respondent, the petitioner afforded with personal hearing. The applicant provides the other documents in support of its refund claim in the course of proceedings.
The Appellate Authority stated that the applicant was in possession of the tax invoices, it can not be said that the applicant obtained the goods. Hence, one of the conditions as stipulated in Section 16(2) of the Central Goods & Services Tax, 2017 – the assessee obtained the goods or services or both – was not pleased. The Appellate Authority figured that the current case was one of “goodless supply on the strength of fake invoices”.
The applicant’s refund application was get refused on apprehension, its supplier furnished the bogus invoices, the court observed. There is no definitive determination on the grounds of any clear material that the invoices given by M/s Shruti Exports to the applicant would be bogus invoices.
For the situation when the respondents can reveal the material to build the allegations for the non-supply of any goods through the M/s Shruti exports to the applicant, the court clarified, the same shall be open for the respondents to execute the same action since they might be warranted as per the law.
| Case Title | M/S Balaji Exim Versus Commissioner, CGST |
| Citation | W.P.(C) Nos.10407/2022 & 10423/2022 |
| Date | 10.03.2023 |
| Appellant | Abhas Mishra, Aakriti P. Mishra, Shyam Bhageria |
| Respondent | Aditya Singla |
| Delhi HC | Read Order |
