There is no lawful impediment in justifying denial of refund of unutilised input tax credit to the petitioner, directions are issued to respondent to effect refund of unutilised input tax credit along with statutory interest
Section 54 of the CGST Act, 2017 — Refund – The petitioner prayed to set aside the impugned order dated 03.01.2020 passed by appellate authority and sought directions to the respondent sanction and disburse the refund amount. The counsel for the petitioner submitted that the petitioner filed application for refund of unutilised ITC under Section 54(3). The respondent in the impugned order relied upon circular No. 14/14/2017-GST dated 06.11.2017 and stated that since the petitioner did not comply with the requirements of the said circular/notification, the refund of unutilised ITC was refused. The counsel for the respondents submitted that against the impugned order, an appeal lies to Appellate Tribunal and the petitioner has the option to file appeal before the Tribunal whenever it is constituted. The court observed from para 5 of the reply submitted by the respondent that there was no requirement of prior intimation/approval from the Development Commissioner prior to the issuance of Circular No.14/14/2017-GST, dated 6.11.2017 or notification No. 48/2017-Central Tax, dated 18.10.2017. The Department cannot insist upon an assessee to retrospectively comply with the circular. The circular operates prospectively from the date of the notification and not retrospectively since the circular came into effect from 06.11.2017.
Held that:- The Hon’ble High Court allowed the application and set aside the impugned order dated 03.01.2020 and directed the respondent to effect refund of unutilised input tax credit along with statutory interest that may be payable thereof within a period of two weeks.