Mahajan Fabrics Pvt. Ltd VS Commissioner, CGST

The petitioner has filed a petition challenging an order dated December 30, 2021, issued by the Joint Commissioner of Central Goods and Services Tax (Appeals-1), referred to as the ‘impugned order’. This order allowed the Revenue’s appeal against a previous decision dated September 12, 2019, made by the Assistant Commissioner.

The petitioner originally applied for a refund of Central Goods and Services Tax (CGST) under Section 54 of the Central Goods and Services Tax Act, 2017, along with Rule 89(1) of the Central Goods and Services Tax Rules, 2017. The application was initially granted by the Assistant Commissioner through an Order-in-Original dated September 12, 2019. This order directed the remittance of ₹22,32,502/- to the petitioner’s specified bank account, which included ₹16,22,489/- as a refund of the Central Tax.

The petitioner in this case challenges an order dated 30th December 2021 issued by the Joint Commissioner of Central Goods and Services Tax (Appeals-1), referred to as ‘the impugned order’. This order overturned a previous decision dated 12th September 2019 made by the Assistant Commissioner (Order-in-Original), which had allowed the petitioner’s application for a refund of CGST under Section 54 of the Central Goods and Services Tax Act, 2017, along with Rule 89(1) of the Central Goods and Services Tax Rules, 2017.

In the initial Order-in-Original, dated 12th September 2019, the petitioner’s refund application was approved, directing an amount of ₹22,32,502/- to be remitted to the petitioner’s specified bank account. This sum included ₹16,22,489/- as CGST refund and ₹6,10,013/- as SGST refund.

The Commissioner subsequently reviewed this decision under Section 107(2) of the Act, which authorized the Commissioner to direct the appeal to the Appellate Authority—in this case, the Joint Commissioner (Appeals). The review, dated 15th March 2020, indicated that the decision to appeal the original order was based on discrepancies found in vehicle numbers listed on two invoices issued by M/s Artex Overseas Pvt. Ltd. Specifically, these vehicle numbers (DL01 LY 4032 and DL01 LY 4411) were not reflected in the e-vahan portal. Consequently, the Commissioner deemed the 126 invoices submitted for the refund application as dubious, leading to the conclusion that the claim for tax refund was inadmissible.

The petitioner’s current petition challenges the validity of the impugned order, arguing against the findings and conclusions drawn by the Commissioner and seeking the reinstatement of the original Order-in-Original allowing the refund.

The petitioner in this case challenges an order dated 30th December 2021 issued by the Joint Commissioner of Central Goods and Services Tax (Appeals-1) (“the impugned order”), which reversed an earlier decision dated 12th September 2019 by the Assistant Commissioner. The initial decision had granted the petitioner’s application for a refund of CGST under Section 54 of the Central Goods and Services Tax Act, 2017, along with Rule 89(1) of the Central Goods and Services Tax Rules, 2017. This refund totaled ₹22,32,502/-, comprising ₹16,22,489/- as Central Tax (CGST) and ₹6,10,013/- as State Tax (SGST), to be deposited into the petitioner’s specified bank account.

The Commissioner subsequently reviewed the Order-in-Original of 12th September 2019 under Section 107(2) of the Act. Following this review, the Commissioner directed that an appeal be filed with the Appellate Authority, which in this instance was the Joint Commissioner (Appeals). The basis for this appeal stemmed from concerns raised regarding two specific invoices issued by M/s Artex Overseas Pvt. Ltd., dated 4th May 2019 (Invoice No. GST/19-20/174) and 11th May 2019 (Invoice No. GST/19-20/208), which listed vehicle numbers DL01 LY 4032 and DL01 LY 4411, respectively. These vehicles were not found registered on the e-vahan portal.

The Commissioner’s review concluded that these discrepancies cast doubt on the validity of the 126 invoices submitted by the petitioner to support their refund claim, suggesting that the entire claim might be unreliable. Consequently, the Revenue filed an appeal against the original refund order based on these findings.

In response, the Joint Commissioner (Appeals) upheld the Revenue’s appeal. They found that the issues raised regarding the two invoices with unverified vehicle registrations on the e-vahan portal raised substantial doubts about the veracity of the entire batch of invoices submitted by the petitioner. Therefore, the Joint Commissioner (Appeals) reversed the Order-in-Original of 12th September 2019, thereby denying the petitioner’s claim for refund.

In challenging the impugned order of 30th December 2021, the petitioner contends that the decision to deny the refund was unjustified and improperly based on a limited review of only a fraction of the submitted invoices. They argue that the decision failed to consider the validity of the remaining invoices and the overall merit of their refund claim under the applicable provisions of the CGST Act and Rules.

The matter is now before the court for adjudication, seeking relief against the impugned order and reinstatement of the original refund decision.

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