Sun pharma Laboratories Limited VS. Union of india

supporting documents were uploaded online. However, the respondent authorities failed to process the refund application within the stipulated time frame. 4. Despite repeated representations made by the petitioner, the respondent authorities failed to take any action on the refund application. Aggrieved by the inaction of the respondents, the petitioner filed the present writ petition seeking directions to the respondent authorities to expeditiously process and grant the refund of Rs.15,84,598/- along with interest at the rate of 18% per annum from the date of filing of the refund application till the date of actual payment.

1.Per contra, Mr. B.K. Gupta, learned Counsel appearing for the respondents, opposed the grant of refund contending that the delay in processing the refund application was attributable to the petitioner’s failure to provide certain requisite documents and information. He submitted that the petitioner failed to produce evidence to establish that the transfer of goods from Unit-II to Unit-I did not qualify as a supply under Section 7 of the CGST Act and therefore, the issuance of invoices was justified. Further, he argued that the petitioner erroneously discharged GST liability on the said invoices, which cannot be rectified by way of a refund claim.

2.Having considered the rival contentions and perused the record, it is evident that the petitioner inadvertently issued invoices for the transfer of goods between its own units, which did not qualify as supply under the CGST Act. The mistake was acknowledged by the petitioner, and they did not declare the transfers as outward supply in the GSTR-01 for the relevant month. However, while filing the GSTR-3B return, the petitioner inadvertently discharged GST liability on the said invoices and subsequently sought refund of the same.

3.The contention raised by the learned Counsel for the respondents regarding the petitioner’s failure to provide requisite documents and information is not tenable. The petitioner has submitted all necessary documents and information along with the refund application, as evidenced by the acknowledgment copy and supporting documents uploaded online.

4.In view of the above, this Court is inclined to allow the present writ petition and direct the respondent authorities to expeditiously process and grant the refund of Rs.15,84,598/- along with interest at the rate of 18% per annum from the date of filing of the refund application till the date of actual payment. The respondent authorities are directed to complete the process of refund within a period of four weeks from the date of receipt of a copy of this order.

5.The writ petition stands disposed of accordingly. No costs.

of the records and submissions made, the Commissioner (Appeals) upheld the rejection of the refund claim on different grounds. It was observed that the petitioner had failed to furnish any evidence to establish that the tax burden had not been passed on to any other person, as required under Rule 92(4) of the CGST Rules, 2017. Additionally, it was noted that the petitioner had not rectified the invoices as required under Section 34 of the CGST Act, which was a mandatory requirement for availing input tax credit.

6.Aggrieved by the order of the Commissioner (Appeals), the petitioner filed a further appeal before the Appellate Tribunal, GST, Siliguri Bench on 20.10.2019. During the pendency of the appeal, the petitioner also filed an application for interim relief seeking a direction to the respondents to refund the amount of excess tax paid by the petitioner.

7.The Appellate Tribunal, after considering the submissions made by both parties and perusing the records, observed that the issue primarily revolved around the petitioner’s failure to rectify the invoices and establish that the tax burden had not been passed on to any other person. The Tribunal noted that while the petitioner had submitted a certificate from a Chartered Accountant certifying the non-passing of the tax burden, such certificate alone was not sufficient to fulfill the requirements of Rule 92(4) of the CGST Rules, 2017.

8.Furthermore, the Tribunal noted that the petitioner had not rectified the invoices as required under Section 34 of the CGST Act, which was crucial for availing input tax credit. The Tribunal found no infirmity in the orders passed by the lower authorities and dismissed the appeal filed by the petitioner.

9.Subsequently, the petitioner filed a writ petition before this Court challenging the orders passed by the lower authorities and the Appellate Tribunal. The petitioner contended that the denial of refund on the ground of non-compliance with Rule 92(4) of the CGST Rules, 2017 and Section 34 of the CGST Act was unjustified, as they had submitted a certificate from a Chartered Accountant certifying the non-passing of the tax burden.

10.Mr. Rahul Tangri, learned Counsel appearing for the petitioner, vehemently argued that the petitioner had complied with all procedural requirements and that the denial of refund was arbitrary and contrary to the principles of natural justice. He contended that the petitioner had inadvertently issued incorrect invoices, but they had rectified the mistake by filing a reply to the Show Cause Notice and appearing for personal hearing before the authorities.

11.On the other hand, Mr. B.K. Gupta, learned Counsel appearing for the respondents, supported the orders passed by the lower authorities and the Appellate Tribunal. He argued that the petitioner had failed to rectify the invoices as required under Section 34 of the CGST Act and had not provided sufficient evidence to establish that the tax burden had not been passed on to any other person.

12.After hearing the submissions made by both parties and perusing the record, I am of the view that the petitioner has failed to establish a prima facie case warranting interference by this Court. The denial of refund by the authorities was based on valid grounds, including non-compliance with procedural requirements and failure to provide sufficient evidence. While the petitioner may have rectified the invoices subsequently, such rectification was done after the issuance of the Show Cause Notice, and it does not absolve the petitioner from the initial non-compliance.

13.Additionally, the certificate provided by the Chartered Accountant, though indicative of the petitioner’s intention not to pass on the tax burden, does not fulfill the specific requirements laid down under Rule 92(4) of the CGST Rules, 2017. Therefore, considering the facts and circumstances of the case, I am inclined to dismiss the writ petition filed by the petitioner.

14.In view of the foregoing, the writ petition stands dismissed. However, there shall be no order as to costs.

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