Department cannot misuse the provision of Section 54(10) of the CGST Act by rejecting the Refund even if the Investigation is pending.

Case Details:

Issue- In the above case, the petitioner claimed that he is entitled to refund under the provisions of section 16 of the Integrated Goods and Services Tax Act, 2017 whereas respondent also admitted that in respect of the goods that have been supplied, the petitioner is entitled to claim the refund under sub-section 3(b) of section 16 of the said Act but that the claim for refund is not being processed by respondent on the ground that the investigation is pending against the petitioner. Petitioner contented that in the teeth of the provisions of sub-section 10 of section 54 of the CGST Act, the action on the part of the respondents refusing to process the refund on the ground that the investigation is pending is untenable.

Held- It was held that as per sub-section 10 of section 54 of the Central Goods and Services Tax Act, 2017, there is no provision to withhold the refund due to reason “Investigation is Pending”. Thus, it would be appropriate if the claim for the refund is processed by the respondent in accordance with law. Although there is no order or decision on record on the application claiming refund. In this view of the matter, it would be appropriate to direct the respondent to process the application made by the petitioner for refund and pass a reasoned order upon hearing the petitioner. The claim for refund be decided as expeditiously as possible on its own merits and preferably within a period of eight weeks from today. The petitioner to appear before the Competent Authority.