No power to place refund in abeyance for incorrect utilisation of ITC unconnected with refund order – Supreme Court {Union of India V/s HCC VCCL Joint Venture (2025) 32 Centax 405 (S.C.)}
Issue:
Whether a refund order can be placed in abeyance under Section 108 of the CGST Act based on allegations unrelated to the refund, without recording any finding that the refund order was erroneous or illegal.
Facts:
- Assessee (HCC VCCL Joint Venture) was granted a refund of Rs. 5.5 crore from the Electronic Cash Ledger.
- Later, the refund was placed in abeyance by the Commissioner under Section 108 of the CGST Act, citing incorrect ITC utilization.
- However, the alleged ITC misuse was not related to the refund order.
- There was no finding that the refund order was erroneous or prejudicial to revenue.
Held:
- High Court held that the refund could not be withheld as:
- The allegation was unrelated to the refund.
- No valid reasoning or opinion was recorded under Section 108.
- Supreme Court dismissed the SLP, upholding the High Court’s order.
Held: There was no reason to interfere refund cannot be placed in abeyance without proper legal basis.
