2023 (4) TMI 424 - HC - GST

Refund of integrated tax paid in respect of certain services - Zero Rated Supplies - intermediary services - rejection of refund on the ground that the services rendered by the petitioner fell within the definition of services by an intermediary and therefore could not be considered as export of services - HELD THAT - After some arguments the learned counsel appearing for the parties submit that the matter may be remanded to the proper officer (Adjudicating Authority) for consideration afresh in the light of the decisions rendered by the High Courts including this Court. The aforesaid course also commends for the reason that the question as to the precise nature of services is vital for determining whether the services are in the nature of services rendered by an intermediary . The petitioner must be provided full opportunity to explain the nature of services before the concerned officer. The present petition is disposed of by setting aside the impugned orders dated 05.12.2020 and 28.12.2021 - matter is restored before the proper officer (Assistant Commissioner GST) to consider the petitioner s case for refund afresh and to take an informed decision.

Summary

Issues involved:
The case involves a petition challenging the rejection of a refund application for integrated tax paid on services claimed to be exported. The main issues include discrepancies in documentation, classification of services as intermediary services, lack of opportunity to address new grounds raised post-show cause notice, and the need for a fresh consideration of the refund claim by the proper officer.

Discrepancies in Documentation:
The petitioner sought a refund of integrated tax paid on services provided to entities abroad, claiming them as zero-rated supplies. However, discrepancies were found by the Assistant Commissioner in the invoices, returns, and remittance details. Despite satisfactory clarifications on most queries, the officer rejected the refund claim due to unresolved issues with remittance details for a specific invoice. This led to a reduction in the turnover of zero-rated supplies and the overall rejection of the refund claim.

Classification of Services as Intermediary Services:
The Assistant Commissioner classified the petitioner's services as those of an "intermediary," not qualifying for export benefits. This classification was not part of the initial show cause notice, depriving the petitioner of the chance to address this crucial aspect. The Appellate Authority upheld this classification, leading to the rejection of the refund claim. The lack of opportunity to contest this classification raised procedural fairness concerns.

Fresh Consideration of Refund Claim:
The High Court, after hearing arguments from both parties, decided to set aside the orders rejecting the refund claim and remanded the matter to the proper officer for a fresh assessment. The Court emphasized the importance of allowing the petitioner a full opportunity to explain the nature of services provided before a decision is made. The case was disposed of with the directive for the proper officer to reconsider the refund claim and make an informed decision, ensuring all contentions of the parties are reserved for future consideration.