2024 (12) TMI 581 - HC - GST

Seeking directions to the respondents to issue refund of Integrated Goods Services Tax (IGST) along with the interest - objection of territorial jurisdiction has been raised on the ground that the refund pertains to the concerned ports of export. Territorial Jurisdiction for entertaining the writ petition - HELD THAT - In the case in hand for invoking jurisdiction of Rajasthan High Court it is pleaded that the petitioner is carrying on business in Rajasthan registered with the GST Authorities at Rajasthan and is being assessed at Rajasthan. No further pleadings have been made for the cause of action or part of cause of action arising in State of Rajasthan - Under Rule 96 (3) the claim of refund upon receipt of information of applicant having filed valid return in FORM GSTR-3(B) shall be processed by the system designated by the Customs or the Proper Officer of the Customs. The derivative being that the claim of refund if not dealt by the system electronically has to be considered by the Customs Authorities of the port wherefrom the goods have been exported. The petitioner is aware of the position and had raised that the grievances of non-grant of refund before the Commissioner of Indian Customs (Exports) of the Ports from where the goods were exported. The reliance on the circular dated 05.07.2017 to contend that Deputy or Assistant Commissioner of Central Tax is the Proper Officer for Rule 96 is misplaced. The notification of 2017 was qua Rule 96 (6) which was deleted w.e.f. 01.07.2017. The Sub-Rule dealt with the case of passing of order by the Proper Officer of the Central Tax or the State Tax in case of withholding of refund under Sub-Rule (5). The Sub-Rule was not relevant for refund of IGST arising due to export of goods - In absence of any pleadings for cause of action or part of cause of action accruing in State of Rajasthan for non-grant of refund and in view of the fact that the application for refund was made at the ports for exports and the claim is to be dealt by the Customs Authorities of the Port the writ petition is dismissed for want of territorial jurisdiction. Refund of IGST inspite of having claimed higher rate of duty of drawback - HELD THAT - Having coming to the conclusion that writ petition cannot be entertained for want of territorial jurisdiction there is no occasion for us to deal with the issue whether the petitioner is entitled to refund of IGST inspite of having claimed higher rate of duty of drawback. The writ petition is dismissed.

Summary

Issues Involved:

1. Territorial Jurisdiction for entertaining the writ petition.
2. Entitlement to refund of Integrated Goods & Services Tax (IGST) despite claiming a higher rate of duty drawback.

Detailed Analysis:

1. Territorial Jurisdiction:

The primary issue addressed in the judgment is the territorial jurisdiction of the Rajasthan High Court to entertain the writ petition filed by the petitioner, a private limited company engaged in exporting natural stones, seeking a refund of IGST. The petitioner argued that since it is registered with the Rajasthan GST Authorities and has a permanent establishment in Rajasthan, the Rajasthan High Court has jurisdiction. However, the respondents contended that the refund pertains to the ports of export, which are outside Rajasthan's jurisdiction.

The court examined Rule 96 of the Central Goods & Service Tax Rules, 2017, which stipulates that the claim for refund of IGST paid on exported goods is to be processed by the system designated by the Customs or the Proper Officer of the Customs at the relevant port of export. The court emphasized that the goods were exported from ports not within the jurisdiction of Rajasthan, and the documents for export were filed at those ports.

Relying on precedents, including the Supreme Court's decision in Union of India & Ors. vs. Adani Exports Limited & Anr., the court held that the facts pleaded by the petitioner, such as carrying on business in Rajasthan and being registered with the GST Authorities in Rajasthan, do not constitute a cause of action within Rajasthan. The court reiterated that for determining territorial jurisdiction, the facts must have a nexus with the subject matter of the dispute, which in this case, is the non-grant of refund by the Customs Authorities at the port of export.

The court concluded that the writ petition could not be entertained for want of territorial jurisdiction, as the cause of action did not arise in Rajasthan. Consequently, the petition was dismissed on this ground.

2. Entitlement to Refund of IGST:

The court did not delve into the merits of the petitioner's entitlement to a refund of IGST despite having claimed a higher rate of duty drawback, as it had already dismissed the writ petition for lack of territorial jurisdiction. The petitioner had argued that the refund could not be denied due to an inadvertent claim of a higher duty drawback and cited a decision from the Gujarat High Court in support. However, since the court found that it lacked jurisdiction, it did not address this issue.

In summary, the Rajasthan High Court dismissed the writ petition on the grounds of lack of territorial jurisdiction, without addressing the substantive issue of the petitioner's entitlement to a refund of IGST.