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2023 (2) TMI 817 - HC - GSTRefund of IGST paid on export - no show cause notice has been given nor any opportunity given to represent the adjudication process - Earlier, protection was granted from inquiry proceedings by the HC - principal grievance on the part of the petitioner is that the proceedings for scrutiny of refund of IGST for the export already made by the petitioner is initiated by the CGST Department even though the proper officer for grant of refund of IGST is the Custom Authorities and therefore, initiation of the actions on the part of the respondent is bad in law - Principles of natural justice. HELD THAT - The order of provisional refund not being a subject matter of appeal nor is there any further proceeding in connection there with nor is any other proceedings of the Act pending for invocation of Section 39, nothing was there for the Court to hold that the order impugned before that Court without the condition precedents for exercise of such powers were satisfied and therefore, the Court held that the authority had lacked the jurisdiction. Before withholding the order, according to the Court, the Commissioner is empowered to withhold the same if he is of the opinion that such refund is likely to adversely affect the revenue. The Commissioner is required to form an opinion that grant of refund is likely to adversely affect and the fact regarding formation of such opinion needs to be reflected in the order passed under Section 39 withholding the refund. There was not a whisper as regards any opinion as envisaged and hence, the Court held that withholding of the refund was not in accordance with law. The Custom Authority having permitted the goods to be exported and the petitioner having paid the IGST on the export, the process of the refund on such IGST after clearance of the goods for export is what is being provided as Rule 96 is very clear that shipping bill of the export needs to be treated as the refund application. Grant of protection (earlier) There was no ambiguity in relation to the consignment except the wrong declaration of the address in the export documents i.e. Export Invoice Shipping Bill. The office of the Commissioner had proposed for lifting of detention of the cargo and it was urged that till the pendency of inquiry at the Customs, it was apprehended that the writ applicant may fly away or abscond if the Cargo is released and there may be heavy loss of custom refund for the different price of old mobile phone vis-a-vis old mobile phones. - The inquiry pertaining to ITC Chain was therefore, directed to be investigated by the office of the Joint Commissioner of CGST. This had made the petitioner to rush to this Court seeking to challenge this alleged action of respondent being high handed and not permitting the Rule 96 to come into operation. Refund allowed subject to enquiry proceedings. Keeping in mind the fact that this Court on noticing the overall circumstances, since had protected the writ applicant from the investigation which had been initiated, at no stage, the authority was precluded from initiating the proceedings of show cause notice. However, till date, it is not so done, therefore, to strike a balance this Court is of the firm opinion that when the export has been permitted by all concerned on the part of the respondents, the petitioner would become entitled to the refund and the same shall be paid with interest to the petitioner. Let the investigation be finalized in eight weeks period from the date of receipt of a copy of this order. Petition allowed.
Issues Involved:
1. Jurisdiction of CGST authorities to scrutinize IGST refunds processed by Customs authorities. 2. Requirement and validity of e-way bills in "bill to ship to" transactions. 3. Legality of detaining goods and threatening coercive actions without prima facie adjudication. 4. Proper documentation and address discrepancies in export transactions. 5. Entitlement to IGST refund and interest. Detailed Analysis: 1. Jurisdiction of CGST Authorities: The primary grievance of the petitioner was the initiation of scrutiny of IGST refunds by the CGST Department, which is argued to be the jurisdiction of Customs Authorities as per Rule 96 of the CGST Rules. The petitioner contended that the Customs Authorities are the proper officers for determining and adjudicating the refund of IGST paid on export, and hence, the actions of the CGST Department were without jurisdiction and not sustainable under the law. The Court questioned the jurisdiction of the respondent No.2 (CGST authorities) to inquire about the export of goods under the provisions of the Customs Act and found no satisfactory reply from the respondents. The Court emphasized that once the e-way bill is generated, the export cannot be disputed, and any doubts regarding the export should be addressed by the Customs Authority. 2. Requirement and Validity of E-Way Bills: The petitioner explained that the transactions were on a "bill to ship to" basis, where only one e-way bill was generated for the movement of goods directly from the vendor to the airport. The respondent insisted on a second e-way bill for the purchases made by the petitioner from M/s.Anjali Enterprise. The petitioner relied on the CBIC press release dated 23.04.2018, which clarified that only one e-way bill is required for "bill to ship to" transactions. The Court noted that the CBIC circular favored the petitioner and that the CGST authorities had no jurisdiction to re-adjudicate or scrutinize the refund granted by the Customs Authorities. 3. Legality of Detaining Goods and Threatening Coercive Actions: The petitioner alleged that the respondent authorities detained the cargo pending clearance for export and issued summons for the production of documents, threatening coercive actions including arrest and further detention. The Court observed that the goods were eventually released by the Customs Authorities and allowed to be exported. The Court also noted that the respondent No.2 had gone to the extent of informing the Customs Authority not to process the refund of IGST paid on export, which was beyond their jurisdiction. 4. Proper Documentation and Address Discrepancies: The respondent authorities raised concerns about the address discrepancies in the export documents, which did not match the address registered under GST. The petitioner clarified that the IEC certificate for Customs purposes carried the old address, while the GST registration contained the current address. The Court found that undue emphasis was placed on the mismatch of addresses, and the petitioner had provided a reasonable explanation. 5. Entitlement to IGST Refund and Interest: The petitioner sought the release of the IGST refund along with interest, arguing that the continuous scrutiny by the CGST authorities was without jurisdiction. The Court directed that the petitioner is entitled to the refund with interest, as the export had been permitted by all concerned authorities. The Court also instructed that the investigation should be finalized within eight weeks, and if no discrepancies are found, the refund should be remitted to the petitioner without any further requirements. Conclusion: The Court allowed the petition, emphasizing that the CGST authorities had no jurisdiction to scrutinize the IGST refunds processed by the Customs Authorities. The petitioner was entitled to the refund with interest, and the investigation was to be concluded within eight weeks. The Court also protected the petitioner from undue harassment and coercive actions during the investigation process.
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