Petitioner's refund cannot be withheld because the supplier of his supplier is under the list of L2 risky supplier.

The petitioner purchased the goods from Sayan Greemochem Private Limited who had purchased goods from Prince Chemicals, who is placed in the list of L2 risky supplier and therefore the IGST refund of the petitioner was withheld on the ground of availing of wrong ITC by the petitioner.

It is, however, found from the record that the petitioner has reversed the Input Tax Credit along with penalty and interest towards the said goods purchased.

Further, none of the provisions of the CGST Act and the IGST Act mandate the petitioner to verify the genuineness of the suppliers of the supplier, even though safeguards is provided to recover the taxes, if not paid or wrongly availed by the petitioner’s supplier or supplier’s supplier.

In this case, the supplier’s supplier is placed in the list of L2 risky supplier and even then, with a hope to get the IGST refund, the petitioner has paid the ITC, but still the refund is not processed and given to the petitioner.

Further, the respondents ought to have granted the provisional refund to the extent of 90% as provided under Section 54(6) of the CGST Act read with Rule 91 of the CGST Rules, which the respondents failed to do so. Even after submission of the positive verification report to the respondent no.7, the respondent no.7 herein has not issued the NOC for issuing the refund and even after issuance of notice and adjourning the matter on some occasions, there is no representation on behalf of respondent no.7. In this case, the petitioner has filed shipping bills for all the exports and the petitioner is not prosecuted for any offence under the Act or under the existing law and has also reversed the ITC, therefore, there is no point for the respondents herein to withheld the refund.

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Refund

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Input Tax Credit

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Fake Invoices

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Bogus ITC

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