Anil Kumar Singh vs. Director, S/O Sanjay Kumar Agarwallahar Patti Nehru Road Thakurganj Brkis 855116, Agarwala’S Bitumex Private Limited

Facts

The appeals were filed by the Revenue against the respondent, Agarwala’s Bitumex Private Limited, concerning the refund of accumulated Input Tax Credit (ITC) for the export of goods. The respondent procured goods under a Bill-to-Ship-to model and exported them. The Revenue objected to the refund, primarily on the grounds that the goods did not cross toll plazas in the State of origin (West Bengal), suggesting the movement was primarily in Bihar/Uttar Pradesh, and that the registrations of some second-line/upstream suppliers were cancelled. The respondent argued that the Bill-to-Ship-to model is permissible, toll plaza receipts are not mandatory, and they are not responsible for irregularities of upstream suppliers. The Revenue also attempted to raise new grounds and rely on fresh evidence before the GST Appellate Tribunal.

Held

The Tribunal held that the Bill-to-Ship-to model is permissible under GST law, and there is no requirement for goods to originate from the registered place of the supplier. The Tribunal found that the respondent had complied with the conditions under Section 16(2) of the CGST Act, 2017, making them eligible for ITC. Regarding the necessity of toll plaza receipts, the Tribunal, relying on the Allahabad High Court's decision in Raghuvansh Agro Farms Ltd. v. State of U.P., held that these receipts are not mandatory for proving transportation. Sufficient evidence, including tax invoices, e-way bills, bilty copies, and payments through banking channels, was deemed adequate. The Tribunal also ruled that the respondent cannot be denied refund of ITC due to the cancellation of registrations of second-line suppliers, as the actual supplier (M/s. KS Metals) had a valid registration and there was no connection between the respondent and the second-line suppliers. Finally, the Tribunal held that additional grounds and fresh evidence raised by the Revenue for the first time before the Tribunal were inadmissible, citing Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules, 2017, which bar additional evidence except in exceptional circumstances. The appeals filed by the Revenue were dismissed.

Key Issues

1. Whether the goods purchased by the respondent can be considered dispatched from West Bengal when no toll plazas in West Bengal were crossed, and movement was shown in Bihar/Uttar Pradesh, for the purpose of availing ITC/refund under Section 16(2) of the CGST Act, 2017? 2. Whether toll plaza receipts are mandatory documents to prove the actual physical movement of goods for availing ITC/refund? 3. Whether ITC/refund can be denied on the ground that the second-line/upstream suppliers of the direct supplier had their GST registrations cancelled ab initio? 4. Whether additional grounds and fresh evidence raised by the Revenue for the first time before the GST Appellate Tribunal are admissible, considering Rule 45(1) of the GSTAT (Procedure) Rules, 2025 and Rule 112(1) of the CGST Rules, 2017? Contentions of the Revenue: The Revenue argued that the lack of toll plaza receipts in West Bengal indicated non-compliance with transportation requirements. They also contended that the cancellation of registrations of second-line suppliers invalidated the ITC claim. Furthermore, the Revenue sought to introduce new grounds related to investigations and licensing requirements for bitumen. Contentions of the Respondent: The respondent argued that the Bill-to-Ship-to model is legally permissible and does not require goods to originate from the supplier's registered place. They asserted that toll plaza receipts are not mandatory, and sufficient documentary evidence like e-way bills, tax invoices, and bank payments were provided. The respondent also maintained that they are not liable for the actions of upstream suppliers whose registrations were cancelled, as their direct supplier had a valid registration. They opposed the admissibility of new grounds raised by the Revenue.