2023 (4) TMI 751 - HC - GST

Rejection of refund claim - refund claim on the basis of e- BRCs/FIRCs furnished by the claimant, addressed to their corporate office in Kolkata, whereas exports done from Bangalore unit - HELD THAT - This Court must observe that the order rejecting refund Annexure-G cannot be sustained as it is premised only on the ground that show cause notice is issued for the earlier two periods, and the petitioner cannot be relegated to avail statutory remedy when it is undisputed that on examination of the critical issue viz., whether the e- BRCs relied upon by the petitioner relates to the Bengaluru unit, the petitioner is permitted refund. The impugned order dated 15.11.2022 rejecting refund must yield, and the proceedings restored to the second respondent to consider the same subject to the outcome of the proceedings that are commenced with issuance of the impugned Show Cause Notice dated 14.09.2022. The second respondent, in the peculiarities of this case, and the grounds urged, must be called upon to decide on the continuation of the proceedings in the light of the petitioner s specific defense that the assumption that these e-BRCs could be used for refund across the other ports in the country would be incongruous as the petitioner exports software and e-BRCs are issued under the aforesaid regulations specific to invoices based on declaration and with necessary uploading with the Joint Director of Foreign Trade. The second respondent must not only be directed to consider continuation of the proceedings in the light of these submissions but also to decide within a certain time frame lest the petitioner is forced into a loop of litigation. The third respondent s Order Refusal order is quashed restoring the same for reconsideration subject to the outcome of the proceedings commenced with the Show Cause Notice dated 14.09.2022, but within four weeks therefrom - petition is allowed in part.

Summary

Issues involved:
The judgment involves the rejection of a claim for refund under the Central Goods and Services Tax Act, 2017 based on a Show Cause Notice and Sanction Order. The issues include the validity of the Show Cause Notice, the rejection of the refund claim, and the jurisdiction of the authorities to issue such notices.

Validity of Show Cause Notice:
The petitioner challenged the Show Cause Notice dated 14.09.2022, which raised concerns about the correlation of e-BRCs with exports from the petitioner's Bangalore unit. The petitioner argued that the e-BRCs were specific to certain transactions under the Foreign Exchange Management Regulations and could not be misused for multiple refunds. It was contended that as a software services business, the petitioner's exports were not "across other ports" as alleged in the notice, affecting the jurisdiction to issue the notice.

Rejection of Refund Claim:
The third respondent rejected the petitioner's claim for refund for the period between April 2021 and June 2021 based on the Show Cause Notice. The petitioner contended that similar issues had been considered previously, and refunds were granted, invoking the principle of res judicata. The petitioner argued that the rejection of the refund based on the notice was unjustified, creating financial constraints.

Jurisdiction of Authorities:
The Court observed that the rejection of the refund solely based on the Show Cause Notice was unsustainable. It directed the restoration of proceedings to reconsider the refund claim, emphasizing that the authorities must consider the specific defense raised by the petitioner regarding the incongruity of using e-BRCs for multiple refunds. The Court highlighted the need for a timely decision by the authorities to prevent prolonged litigation and granted the petitioner the liberty to submit a detailed response with necessary documents.