Order Date – 19 September 2024

Parties: Kunal Autotech Private Limited Vs Union of India & Ors.

Facts – 

• The Petitioner, Kunal Autotech Private Limited, filed an application dated 02.11.2022 claiming accumulated input tax credit on account of zero rated supply effected in the month of September 2022.
• The adjudicating authority sanctioned refund part of the demand, while rejecting the balance and the order was subject to review under Section 107(2) of the CGST Act. The reviewing authority concluded that the refund was wrongly sanctioned to the petitioner and directed that appeal be filed against the order.
• The appellate authority issued a Show Cause Notice, found errors in the adjudicating authority’s reliance on the petitioner’s reconciliation statement, and highlighted mismatches in GSTR-2B, GSTR-3B, and ITC.

Issue – 

• Whether the rejection of refund on account of mismatches in GSTR-2B, GSTR-3B is valid?

Order – 

• The Hon'ble High Court observed that It is apparent from the above, that although the appellate authority has faulted the adjudicating authority for not carefully examining the reconciliation statement and passing a refund order without sufficient discussion, the appellate authority has also not examined the question of reconciliation. There is neither any discussion nor any finding regarding the reconciliation statement furnished by the petitioner.
• In terms of Section 107(11) of the CGST Act, the appellate authority is required to decide the question in issue and cannot remand the matter to the adjudicating authority. In the present case, although, the appellate authority has faulted the adjudicating authority in not addressing the question of reconciliation statement, the appellate authority has also not addressed the same.
• Hence it was held that the appellate authority shall decide the appeal afresh after affording the parties an opportunity of being heard.