Hyderabad: Telangana high court has dismissed two petitions filed by PH Jewels challenging proceedings over a ₹3.54-crore input tax credit (ITC) refund and allegations that duty-free gold procured for exports was diverted to the domestic market.The court held that tax authorities had sufficient grounds to reopen the case and that the proceedings were neither without jurisdiction nor barred by limitation.The dispute stemmed from an assessment order that had allowed PH Jewels an ITC refund of ₹3.54 crore, which was subsequently disallowed.In Oct 2023, the high court directed the commercial taxes department to release the refund within 30 days. However, the department sought a review, contending that the company had suppressed material facts relating to proceedings initiated by the Directorate of Revenue Intelligence and customs authorities. Accepting the contention, the court recalled its earlier order in June 2024 and restored the matter for fresh consideration.PH Jewels argued that the second revision was barred by the four-year limitation period prescribed under section 32 of the Telangana Value Added Tax Act. It also contended that the commissioner lacked the authority to revise an order that had already been subjected to revision and maintained that there was no conclusive evidence that its refund claim was based on forged documents.The department, however, alleged that PH Jewels and three other jewellers had procured 2,458 kg of duty-free gold worth over ₹638 crore from nominated agencies but diverted the jewellery into the domestic market while using forged shipping bills to project export compliance.According to the department, PH Jewels purchased 872 kg of gold from MMTC Ltd but exported only 456.6 kg through 14 shipping bills. Copies of genuine shipping bills were allegedly reused to obtain additional quantities of gold from HDFC, Diamond India Ltd and State Bank of India. Authorities also pointed to discrepancies between airport departure and cargo records, alleged hawala routing of export proceeds and pending DRI proceedings.The bench observed that suppression of these proceedings amounted to fraud on the court and reiterated that fraud vitiates all subsequent acts. It further held that the period during which earlier favourable orders remained in force could be excluded while calculating the limitation period under section 32(6) of the Act.Dismissing both petitions without costs, the court granted PH Jewels liberty to submit its response to the revisional notice.
