Delhi High Court Directs AAI to Seek Appellate Remedy for Rejected CENVAT Credit Claim
Court advises Airports Authority of India to approach the Appellate Authority under the CGST Act after Rs. 9.34 Crore CENVAT Credit is denied.
In a significant decision, the Delhi High Court has advised the Airports Authority of India (AAI) to pursue an appellate remedy under the Central Goods and Services Tax Act, 2017, following the rejection of its CENVAT Credit claim amounting to Rs. 9.34 crores. The Court, presided over by Justices Prathiba M. Singh and Shail Jain, passed the order on September 17, 2025, in response to a writ petition filed by AAI.
The dispute stems from a transitional credit period covering April to June 2017, just before the implementation of the Goods and Services Tax (GST) regime. AAI had initially filed an ST-3 return claiming CENVAT Credit of Rs. 8.06 crores but was unable to amend the return due to technical issues with the portal. Subsequently, AAI filed a TRAN-1 form to claim a total credit of Rs. 17.40 crores. However, the Adjudicating Authority rejected Rs. 9.34 crores of this claim, citing discrepancies with the ST-3 returns and incomplete supporting documentation.
AAI contended that software glitches prevented the filing of the correct returns and argued for leniency, citing a Supreme Court judgment in Central Board of Indirect Taxes and Customs v. Aberdare Technologies Private Limited, which emphasizes that software limitations should not impede rightful claims. However, the Department countered that AAI failed to provide necessary documentation and clarifications, thus justifying the credit rejection.
The High Court observed that the rejection was not solely based on technical issues but also due to insufficient documentary evidence supporting AAI's claim. Emphasizing that the impugned adjudication order is appealable, the Court found no jurisdictional error or arbitrary exercise of power warranting interference under writ jurisdiction.
The Court has granted AAI until November 15, 2025, to file an appeal with the Appellate Authority, along with the requisite pre-deposit. It also allowed AAI to submit any additional documents supporting its claim. If the appeal is resolved in AAI's favor, a refund of the pre-deposit with statutory interest will be awarded.
This decision underscores the procedural rigor required for claims under the GST regime and highlights the judiciary's role in guiding entities towards appropriate legal remedies.
Bottom Line:
Goods and Services Tax (GST) - Transitional Credit - Rejection of CENVAT Credit due to mismatch in ST-3 Returns and incomplete supporting documents - Writ jurisdiction not the proper remedy - Petitioner directed to avail appellate remedy under CGST Act, 2017.
Statutory provision(s): Central Goods and Services Tax Act, 2017, Section 107
Airports Authority of India v. Union of India, (Delhi)(DB) : Law Finder Doc Id # 2788492
