TMI Blog2023 (4) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... h a show-cause notice in RFD-08 on 28.06.2022 for production of books of account, i.e., input wise details of spare parts used during the assembling/manufacturing process of e-vehicles in order to ascertain the amount of inputs used during the assembling/manufacturing of e-vehicles only and fixing the date for personal hearing to 13.07.2022. The petitioner replied to the show-cause notice on 06.07.2022 and submitted the documents, as mentioned at serial no. (a) to (i) in the said paragraph, but the petitioner failed to submit the input wise details of spare parts used during the assembling/ manufacturing process of e-vehicles. Therefore, no illegality or irregularity has been committed by the authority in rejecting the refund application of the petitioner. It is admitted on the part of the opposite parties that the dispute is with regard to refund of Rs.5,18,230/-, which requires proper adjudication by the authority on production of documents, as claimed by the opposite parties. Therefore, excluding Rs.5,18,230/-, out of Rs.2,22,97,228/-, the balance amount has to be refunded to the petitioner. If any further amount is found to be refundable, the same can be paid after final adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s spare parts chargeable to GST @18% and 28% to its channel partners (dealers), as they are required to provide warranty of their products. As the input and output rate of GST on spare parts are same, no ITC gets accumulated in respect of spare parts. Hence, the supply of spare parts is not treated as inverted sales. 2.1 During the tax period from December 2021 to January 2022, the petitioner had filed return in GSTR-1 in respect of details of outward supplies of goods or services and also filed return in Form GSTR- 3B in respect of details outward supplies and inward supplies of goods or services. In accordance with the regular practices followed by the petitioner for the previous tax periods, i.e., filing of periodic refund application, it filed refund application on 02.06.2022 in respect of accumulated unutilised ITC of the input goods in Form GST-RFD-01 to the tune of Rs.1,57,92,298.00 for the period December 2021 to January 2022 and it was issued with receipt of refund application, i.e., Refund ARN Receipts. On 22.06.2022, the petitioner submitted all the relevant documents in support of its refund application claiming refund of Rs.1,57,92,298.00 for the period December 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te party no.2 called upon the petitioner on 29.07.2022 through e-mail, wherein the petitioner was asked to provide the documents within 2 days of the service of the letter in connection with refund application submitted under Section-54(3) of CGST/OGST Act for the period from December, 2021 to January, 2022. In compliance thereof, the petitioner filed its reply on 30.07.2022 to the questionnaire given by producing the books of account before opposite party no.2, who examined the same. By so submitting, the petitioner prayed for allowing the refund application as early as possible in the light of the statutory provision. But the petitioner was issued and served with Form- GST-RFD-06 dated 02.08.2022, whereby its refund application dated 02.06.2022 for the period from December, 2021 to January, 2022 was rejected by opposite party no.1 on the ground that it had not submitted the entire books of account. Hence, this writ petition. 3. Mr. R.P. Kar, learned counsel appearing for the petitioner vehemently contended that for the period from 01.11.2021 to 30.11.2021, the refund was partially disallowed by opposite party no.1, which was challenged before the appellate authority, i.e, Addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of refundable amount on account of inverted duty structure. It is further contended that computation of refund on account of Inverted Duty Structure is done on the basis of the formula provided under Rule-89(5) of the OGST Rules. The same having not been adhered to, the petitioner is not entitled to get the benefit, as claimed in the application itself. Therefore, he contended that the writ petition should be dismissed. 5. This Court heard Mr. R.P. Kar, learned counsel appearing for the petitioner and Mr. Sunil Mishra, learned Additional Standing Counsel appearing for CT GST Department in hybrid mode and perused the records. Pleadings have been exchanged between the parties and with the consent of learned counsel for the parties, the writ petition is being disposed of finally at the stage of admission. 6. For just and proper adjudication of the case, relevant provisions of the Act and Rules are referred below:- Chapter-XI of the OGST Act, 2017 deals with refund. Sec.54. Refund of tax. xxx xxx xxx (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectronically: a. Refund of unutilized input tax credit (ITC) on account of exports without payment of tax; b. Refund of tax paid on export of services with payment of tax; c. Refund of unutilized ITC on account of supplies made to SEZ Unit/SEZ Developer without payment of tax; d. Refund of tax paid on supplies made to SEZ Unit/SEZ Developer with payment of tax; e. Refund of unutilized ITC on account of accumulation due to inverted tax structure; f. Refund to supplier of tax paid on deemed export supplies; g. Refund to recipient of tax paid on deemed export supplies; h. Refund of excess balance in the electronic cash ledger; i. Refund of excess payment of tax; J. Refund of tax paid on intra-State supply which is subsequently held to be inter-State supply and vice versa; k. Refund on account of assessment/provisional assessment/appeal/any other order; l. Refund on account of any other ground or reason. Clause-13 deals with provisional refund, which reads as follows: 13. Doubts get raised as to whether provisional refund would be given even in those cases where the proper officer prima-facie has sufficient reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent rates of tax, in the formula provided in rule 89(5) of the CGST Rules, the term Net ITC covers the ITC availed on all inputs in the relevant period, irrespective of their rate of tax. b) The calculation of refund of accumulated ITC on account of inverted tax structure, in cases where several inputs are used in supplying the final product/output, can be clearly understood with the help of following example: i. Suppose a manufacturing process involves the use of an input A (attracting 5 per cent GST) and input B (attracting 18 per cent GST) to manufacture output Y (attracting 12 per cent GST). ii. The refund of accumulated ITC in the situation at (i) above, will be available under section 54(3) of the CGST Act read with rule 89(5) of the CGST Rules, which prescribes the formula for the maximum refund amount permissible in such situations. iii. Further assume that the applicant supplies the output Y having value of 3,000/-during the relevant period for which the refund is being claimed. Therefore, the turnover of inverted rated supply of goods and services will be Rs. 3,000/-. Since the applicant has no other outward supplies, his adjusted total turnover w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16(2)(c) and section 42(2) Self-certified copies of invoice entered in Annexure-B whose details are not found in GSTR-2A of the relevant period. Statement 1A under rule 89(5) Statement 1A under rule 89(2)(h) Self-declaration under rule 89(2)(l) if amount claimed does not exceed two lakh rupees, certified under rule 89(2)(m) otherwise Annexure-B to the aforesaid circular, which deals with statement of invoices to be submitted with application for refund of unutilized ITC, is given below in a tabular form: Sr. no GSTIN of the Supplier Name of the Supplier Invoice Details Type Central Tax State Tax/Union Territory Tax Integrated Tax Cess Eligible for ITC Ammount of eligible ITC Whether invoicing including in G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned, it is made clear that in the show cause notice issued in FORM-GST-RFD-08 on 28.06.2022, though the petitioner, being the taxpayer, was asked to submit the entire books of account for the concerned period applied for refund, but, in response to RFD-08, the petitioner failed to submit the same and, as such, the amount of refund to be sanctioned could not be determined without proper verification of books of account. Therefore, the refund application of the petitioner was rejected. 10. On perusal of the statutory provisions and the circular governing the field, it is made clear that in order to get refund as per formula given under Rule- 89(5), the petitioner has to adhere to the said provisions. The prayer for refund has not been taken into consideration in proper perspective while passing the order impugned on the plea that the petitioner had not produced the relevant documents. What the petitioner had to submit that has already been mentioned in the provisions of the Act and Rules and CBIC guidelines, as mentioned above. Had the petitioner adhered to the same, no new plea would have been taken at this stage contending that since the petitioner had not produced books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead as follows: 10. That it is humbly submitted that verification of the statement submitted by the petitioner on dt:01.08.2022 revealed that net ITC for the tax period December, 2021 to January, 2022 has been reflected at Rs.2,28,15,458/- as per the monthly model wise vehicle manufactured and input used thereon. But the net ITC has been calculated as per Rule 89(5) of the OGST Rules and reflected in RFD-01 at Rs.2,22,97,228/-. Thus, there lied a mismatch of Rs.5,18,230/- in the net ITC amount disclosed. On account of such mismatch, the invoices of suppliers of the petitioner are required to be verified. But the petitioner failed to comply on this score. In absence of such compliance and in the interest of Govt. revenue the refund application of the petitioner has been rejected by the proper officer and the refund rejection order has been issued in RFD-06 on dated 02.08.2022. 13. It is admitted on the part of the opposite parties that the dispute is with regard to refund of Rs.5,18,230/-, which requires proper adjudication by the authority on production of documents, as claimed by the opposite parties. Therefore, excluding Rs.5,18,230/-, out of Rs.2,22,97,228/-, the balan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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