BACKGROUNDThe proceedings arose from an SCN under Section 73 alleging excess ITC for the financial years 2018-19 to 2020-21. The Revenue subsequently appropriated part of the amount already paid and disputed whether the remaining reversal could be mapped to the demand.The taxpayer had made reversals through the electronic ledgers and furnished reconciliation material. The first appellate authority accepted the reconciliation and held that the excess ITC had been reversed, but the Revenue challenged the order, particularly concerning the proof of reversal and liability for interest and penalty.COURT OBSERVATIONThe Tribunal found no reason to disagree with the first appellate authority's conclusion that the excess ITC had been reversed. The Revenue's objection that there was no proof linking the payments to the disputed liability was not accepted because the reversal had been acknowledged through DRC-04 and the reconciliation had been scrutinised by the appellate authority.However, the Tribunal found that the appellate authority had not properly considered the liability for interest and penalty. Since the demand was under Section 73 and the relevant period fell within Section 128A, the Tribunal held that the taxpayer was entitled to the benefit of Section 128A subject to compliance with its prescribed procedure.FINAL VERDICTThe matter was remanded to the first appellate authority under Section 113(1) for fresh computation of interest and penalty, if any, attributable to the taxpayer. The taxpayer was to be given an opportunity of hearing, and the instructions contained in Circular No. 192/04/2023-GST were to be considered.If any interest or penalty liability remained after fresh computation, the taxpayer was permitted to seek waiver under Section 128A, which was to be considered in accordance with the relevant provisions and Circular No. 238/32/2024-GST.
ATANU MONDAL v. DIRECTOR, M/s D.R. STEEL CONSTRUCTION CO. PVT. LTD. 18-08-2026
BACKGROUNDThe proceedings arose from an SCN under Section 73 alleging excess ITC for the financial years 2018-19 to 2020-21. The Revenue subsequently appropriated part of the amount already paid and disputed whether the remaining reversal could be mapped to the demand.The taxpayer had made reversals through the electronic ledgers and furnished reconciliation material. The first appellate authority accepted the reconciliation and held that the excess ITC had been reversed, but the Revenue challenged the order, particularly concerning the proof of reversal and liability for interest and penalty.COURT OBSERVATIONThe Tribunal found no reason to disagree with the first appellate authority's conclusion that the excess ITC had been reversed. The Revenue's objection that there was no proof linking the payments to the disputed liability was not accepted because the reversal had been acknowledged through DRC-04 and the reconciliation had been scrutinised by the appellate authority.However, the Tribunal found that the appellate authority had not properly considered the liability for interest and penalty. Since the demand was under Section 73 and the relevant period fell within Section 128A, the Tribunal held that the taxpayer was entitled to the benefit of Section 128A subject to compliance with its prescribed procedure.FINAL VERDICTThe matter was remanded to the first appellate authority under Section 113(1) for fresh computation of interest and penalty, if any, attributable to the taxpayer. The taxpayer was to be given an opportunity of hearing, and the instructions contained in Circular No. 192/04/2023-GST were to be considered.If any interest or penalty liability remained after fresh computation, the taxpayer was permitted to seek waiver under Section 128A, which was to be considered in accordance with the relevant provisions and Circular No. 238/32/2024-GST.
BackgroundThe 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 VerdictThe 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.
PR. COMMISSIONER, CGST & CX, SILIGURI COMMISSIONERATE v. AGARWALA’S BITUMEX PRIVATE LIMITED 08-08-2026
BackgroundThe 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 VerdictThe 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.
BackgroundThe respondent, a manufacturer of electrical apparatus, also sold MEIS duty credit scrips (exempt from 13.10.2017). A Section 74 SCN required reversal of proportionate ITC of Rs. 74,75,604 under Section 17(2) and Rules 42/43 for FY 2017-18 to 2019-20, with interest and equal penalty, and this was confirmed. The First Appellate Authority set the demand aside, treating Notification 14/2022 (which excludes the value of scrips from exempt supplies) as clarificatory and beneficial, and so retrospective. Revenue appealed, and the respondent objected that the appeal was below the Rs. 20 lakh limit in Circular 207/1/2024-GST.Final VerdictThe Tribunal held that CBIC circulars do not bind the Tribunal, but on the circular’s own terms the appeal was maintainable, because the composite amount exceeded the limit and the issue was interpretational. On merits, Notification 14/2022 commences on its publication and the rule-maker, though empowered under Section 164(3), chose not to give it retrospective effect; the insertion of clause (d) is not clarificatory or curative but confers a fresh benefit prospectively from 05.07.2022, and ITC being a concession cannot be claimed retrospectively as a vested right (Sedco Forex, Sree Sankaracharya University). The appellate authority’s contrary view was therefore wrong. However, since the respondent filed all returns, disclosed the scrip sales and acted on a bona fide view known to both sides, no fraud, wilful misstatement or suppression was established and Section 74(1) could not be invoked (Anand Nishikawa; CBIC Instruction 05/2023-GST). Applying Section 75(2), the proper officer was directed to re-determine the liability as if under Section 73 after a hearing, and the appeals were disposed of accordingly.
THE COMMISSIONER, CGST & CX, KOLKATA NORTH COMMISSIONERATE v. POWER TECH GLOBAL PRIVATE LIMITED 05-08-2026
BackgroundThe respondent, a manufacturer of electrical apparatus, also sold MEIS duty credit scrips (exempt from 13.10.2017). A Section 74 SCN required reversal of proportionate ITC of Rs. 74,75,604 under Section 17(2) and Rules 42/43 for FY 2017-18 to 2019-20, with interest and equal penalty, and this was confirmed. The First Appellate Authority set the demand aside, treating Notification 14/2022 (which excludes the value of scrips from exempt supplies) as clarificatory and beneficial, and so retrospective. Revenue appealed, and the respondent objected that the appeal was below the Rs. 20 lakh limit in Circular 207/1/2024-GST.Final VerdictThe Tribunal held that CBIC circulars do not bind the Tribunal, but on the circular’s own terms the appeal was maintainable, because the composite amount exceeded the limit and the issue was interpretational. On merits, Notification 14/2022 commences on its publication and the rule-maker, though empowered under Section 164(3), chose not to give it retrospective effect; the insertion of clause (d) is not clarificatory or curative but confers a fresh benefit prospectively from 05.07.2022, and ITC being a concession cannot be claimed retrospectively as a vested right (Sedco Forex, Sree Sankaracharya University). The appellate authority’s contrary view was therefore wrong. However, since the respondent filed all returns, disclosed the scrip sales and acted on a bona fide view known to both sides, no fraud, wilful misstatement or suppression was established and Section 74(1) could not be invoked (Anand Nishikawa; CBIC Instruction 05/2023-GST). Applying Section 75(2), the proper officer was directed to re-determine the liability as if under Section 73 after a hearing, and the appeals were disposed of accordingly.
