2021 (9) TMI 617 - HC - Customs

Refund of IGST with interest - goods exported by the Petitioners during the Transitional Period - Vires of Paragraph 11(d) read with 12A(a) (ii) of the Notes and Conditions of the Notification No.131/2016-Cus. (N.T.) dated 31.10.2016 (Annexure P-3) as amended by Notification No.59/2017-Cus. (NT) dated 29.06.2017 (Annexure P4) and Notification No.73/2017-Cus. (NT) 26.07.2017 (Annexure P5) - vires of Circular No.37/2018-CUSTOMS dated 09.10.2018 - duty drawback - HELD THAT - The issue decided in the case of TMA INTERNATIONAL PVT. LTD. ORS. VERSUS UNION OF INDIA ANR. 2021 (4) TMI 230 - DELHI HIGH COURT where it was held that While granting refund to the petitioners, the petitioners will be granted interest at the rate of 7% simple, from the date, when the shipping bills were filed by them, till the date of actual refund, which, in this case, ought not to go beyond 26.04.2021. The respondents are directed to carry out a verification exercise of the claim made by the petitioners within 12 weeks from today and submit a report to this Court. The petitioners shall be at liberty to file the relevant documents as may be called for by the jurisdictional authority in support of its claim. In case the respondents find the claim of the petitioners to be correct, the refund shall be processed by the respondents without awaiting further orders from this Court in accordance with law. List for reporting compliance on 10th January, 2022.

Summary

Issues:
Challenge to vires of circulars denying IGST refund on exports during transitional period, verification of claim by jurisdictional authority, absence of relevant documents for refund verification.

Analysis:
1. The petitioners filed a petition challenging the validity of certain provisions and circulars related to the refund of IGST paid on goods exported during the transitional period between the pre and post GST regime. They sought various reliefs, including a declaration that the provisions and circulars were ultra vires and unconstitutional. The petitioners argued that due to lack of clarity from the GST or Customs department, they had inadvertently claimed drawback under the wrong provision.

2. The respondents, through a circular, denied the refund of IGST on the ground that exporters who voluntarily filed declarations were deemed to have relinquished their IGST claims. The learned counsel for the petitioners cited a previous judgment by the court in a similar case, emphasizing that exporters should not be deprived of the IGST refund due to technical glitches during the transitional phase of GST implementation. The court acknowledged the challenges faced by taxpayers in understanding GST procedures and the need for a taxpayer-friendly approach.

3. The court noted that the legal issue raised in the present petition was previously settled in the judgment cited by the petitioners. The respondents did not dispute this fact. As a result, the court directed the respondents to conduct a verification exercise of the petitioners' claim within 12 weeks and submit a report to the court. The petitioners were given the opportunity to provide relevant documents to support their claim. If the respondents found the claim to be valid, they were instructed to process the refund without further delay in accordance with the law.

4. The court scheduled a compliance report on a specified date and ordered the uploaded order to the website immediately. Additionally, the court directed the forwarding of a copy of the order to the learned counsel through e-mail. The judgment highlighted the importance of ensuring that exporters were not unfairly denied the substantive benefit of the IGST paid on exports due to procedural errors or lack of clarity during the transitional phase of GST implementation.