2023 (7) TMI 939 - HC - GST

Refund of excess IGST paid - Payment of IGST @18% instead of 0.1% erroneously - petitioner mainly contended that the respondents have committed an error in denying the benefit of concessional rate of duty as provided under notification No. 41 of 2017 Integrated Tax (Rate) on the inter-State supply of taxable goods - HELD THAT - The duty is cast upon the registered recipient to export the goods within a period of 90 days from the date of issue of tax invoice by the registered supplier - In the present case, the petitioner has placed on record the invoice which is of 30.6.2019 and thereafter the buyer i.e. Quality Biz Chem India Pvt. Ltd., Mumbai has exported the goods under shipping bill dated 6.7.2019 - The conditions mentioned in the aforesaid notification clearly envisages that all the conditions are not to be fulfilled or complied with by the petitioner but the conditions are to be complied with by the exporter. The petitioner uploaded the refund claim on 12.3.2021 however, the respondent on a technical ground did not grant the refund and passed the impugned order dated 22.6.2021. The Hon ble Apex Court in M/S BONANZA ENGINEERING CHEMICAL PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE 2012 (3) TMI 69 - SUPREME COURT has taken a view that merely because by mistake, the assessee paid duties on the goods which are exempted from payment does not mean that the goods would become goods liable for the duty under the Act. The order dated 22.6.2021 passed by the respondents is hereby quashed and set aside and the respondents are directed to refund the amount of 23,09,100/- with interest applicable as per law within reasonable time from the date of receipt of copy of this judgment - petition allowed.

Summary

Issues Involved:
The petition involves a challenge to an order denying a refund claim under Article 226 of the Constitution of India, based on the interpretation of Notification No. 41/2017 - Integrated Tax (Rate) dated 23.10.2017. The key issues include the correct application of conditions for availing concessional rate of duty, compliance with procedural requirements, and the authority's discretion in granting refunds.

Summary:

Issue 1: Interpretation of Notification No. 41/2017 - Integrated Tax (Rate)
The petitioner, a GST registrant, supplied goods at the concessional rate of IGST for export purposes but mistakenly paid full duty initially. The petitioner subsequently issued a credit note for the excess amount and filed a refund claim. The respondent rejected the claim citing non-compliance with conditions under the notification. The petitioner argued that the conditions were fulfilled, emphasizing that the recipient's obligation to export within 90 days was met. The court analyzed the notification's requirements and held that the conditions were primarily for the exporter to fulfill, not the petitioner. Citing relevant case law, the court ruled in favor of the petitioner, directing the refund of the excess amount with interest.

Issue 2: Procedural Compliance and Refund Denial
The respondent denied the refund claim based on alleged non-submission of required documents and non-compliance with specific conditions of Notification No. 41/2017. The respondent contended that the petitioner failed to provide necessary documentation, including order copies and compliance details. The court reviewed the submissions and observed that technical grounds should not impede substantial benefits. Referring to precedent, the court emphasized that procedural lapses should not hinder legitimate claims. Ultimately, the court found in favor of the petitioner, quashing the order and directing the refund amount to be repaid promptly.

This judgment highlights the importance of correctly interpreting tax notifications, fulfilling export-related conditions, and ensuring procedural compliance in refund claims under GST laws. The court's decision underscores the need for authorities to consider substantive rights over technicalities and adhere to legal principles in adjudicating refund disputes.