Refund of ITC Can’t be Denied on Ground that One of Suppliers Had Erroneously Mentioned HSN in Its Invoices | HC

Case Details: Simran Chandwani v. Principal Commissioner of CGST, Delhi - [2023] 155 taxmann.com 318 (Delhi)

Judiciary and Counsel Details

• • Vibhu Bakhru & Amit Mahajan, JJ.
  • Vineet Bhatia, Aamnaya Jagannath Mishra, Bipin Punia & Ms Nidhi Aggarwal, Advs. for the Petitioner.
  • Vijay Joshi and Shubham Chaturvedi, Adv. for the Respondent.

Facts of the Case

The petitioner was engaged in the business of selling footwear which was taxable at 5% if value of product was below Rs. 1,000 while tax would be 12% if value of footwear was above Rs. 1,000. It filed refund application but the department denied refund on the ground that one of its supplier had erroneously classified the supplies as HSN 6404 in its invoices instead of HSN 6406. It filed writ petition against the rejection of refund application.

High Court Held

The Honorable High Court noted that the petitioner had produced a certificate from the said supplier who acknowledged that it had incorrectly classified goods under HSN 6404 instead of HSN 6406. Further, the GST authorities accepted wrong classification of product by a singular supplier as correct but had not accepted correct classification of goods which all other suppliers adopted in their invoices. Therefore, the Court held that the refund of ITC could not be denied to petitioner when all other suppliers had mentioned correct classification.