HC Sets Aside Rejected Appeal Assuming Petitioner Sought ITC Refund

Case Details: OHMI Industries Asia (P.) Ltd. v. Assistant Commissioner, Central Goods and Services Tax - [2023] 150 taxmann.com 497 (Delhi)

Judiciary and Counsel Details

• • Vibhu Bakhru & Amit Mahajan, JJ.
  • Sparsh Bhargava, Adv. for the Petitioner.
  • Anish Roy for the Respondent.

Facts of the Case

In this petition, the petitioner challenged the order rejecting appeal and order rejecting refund of the integrated tax paid on the export of services being zero rate supply. It was contended that the refund was rejected on basis of Rule 89(4) but this rule would be applied only for refund in respect to exports made without payment of integrated tax.

High Court Held

The Honorable High Court noted that in the instant case, the Adjudicating Authority had verified that petitioner had discharged his tax liability in relation to zero rated supplies for October, 2018 and that same was also reflected in GSTR 3B in respect of said month and refund was rejected by Adjudicating Authority by referring to sub-clause (D) of Rule 89(4) of Central Goods and Services Tax Rules, 2017. However, Rule 89(4) applies only in cases of zero rated supply of goods or services, without payment of tax under bond or letter of undertaking and not to cases of refund of integrated tax paid on zero rated supply.

Moreover, the Appellate authority also failed to address the contention and proceeded to mechanically reject petitioner’s appeal on, ex facie, erroneous assumption that petitioner was seeking refund of accumulated ITC. Therefore, it was held that the impugned order could not be sustained and matter was to be remanded to Appellate Authority to decide matter afresh.