Background

The respondent exported bitumen and steel bars and claimed refunds of accumulated ITC of Rs. 11,41,828 (January 2025) and Rs. 27,65,697 (February 2025). The refunds were rejected because toll data showed the supplier’s vehicles never crossed West Bengal, and because its supplier, KS Metals, had bought from two dealers whose registrations were cancelled ab initio. The Appellate Authority allowed the refunds, and Revenue appealed, adding new grounds (Customs letters, a DGGI probe of a group unit, and bitumen licensing).

Final Verdict

The Tribunal noted that tax payment, verification of RFD-01, the exports and bank realisation were all undisputed. The goods moved under a “bill-to ship-to” model to LCS Jogbani, and no provision of GST law requires goods to start from the supplier’s registered place, nor are toll-plaza receipts a mandatory condition for ITC (Raghuvansh Agro Farms, All HC). The respondent had satisfied Section 16(2)(a)–(d) through invoices, e-way bills, bilty, shipping bills, EGM, a transporter’s certificate and banking records, none of which Revenue disputed. Its direct supplier was validly registered, and a recipient cannot be denied refund for irregularities of second-line suppliers with whom it has no nexus. The new grounds were outside the SCNs and unsupported by any document, and could not be entertained in view of Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules. Revenue’s appeals were dismissed and the Orders-in-Appeal upheld.