2022 (5) TMI 1138 - HC - GST

Refund of IGST - Separate application was not filed - treatment of shipping bill as refund application - export of goods - whether Circular No. 37/018-Cus dated 09.10.2018 is ultra virus the provisions of CGST Act, 2017 or not - Section 16(3)(b) of the IGST Act read with Section 54 of the CGST Act and Rule 96 of the CGST Rules - HELD THAT - A separate application for refund was not required to be filed. - the shipping bills would operate as a refund application as envisaged under Section 54 of the CGST Act read with Section 16 of the IGST Act, as also Rule 96(1) of the CGST Rules. Interest on Delayed Refund - HELD THAT - Once the petitioner had taken steps to move the Court and notice was issued in the writ petition, the respondents were, in a sense, forewarned that statutory interest would kick-in - notice in this petition was issued on 01.10.2021, when the revenue was represented by counsel. In the given facts, in the very least, interest should accrue to the petitioner at the statutory rate i.e., 6% (simple) from 01.10.2021 - Petition allowed.

Summary

Issues:
1. Interpretation of Circular No. 37/018-Cus dated 09.10.2018 regarding refund of IGST.
2. Entitlement to refund of IGST paid on exported goods.
3. Requirement of a separate application for seeking refund of IGST.
4. Accrual of statutory interest on delayed refund.

Analysis:
1. The petitioner sought a writ to declare Circular No. 37/018-Cus dated 09.10.2018 ultra vires the CGST Act, claiming that the circular restricted IGST refund when drawback was claimed under a specific column of the drawback schedule. The petitioner exported goods and paid IGST amounting to Rs.7,12,996/-. Due to an error in the shipping bills, the petitioner triggered declarations indicating no claim for IGST refund. However, the rates under both columns 'A' and 'B' for drawback were identical at 2%. The petitioner argued that a separate refund application was not needed as per Section 54 of the CGST Act and Rule 96 of the CGST Rules, and statutory interest at 6% should apply if the refund was delayed beyond 60 days.

2. The respondents contended that no refund was granted as no application was made to correct the error in the shipping bills. The Court referred to past judgments and agreed with the petitioner that a separate refund application was unnecessary. The shipping bill itself could serve as the refund application. Therefore, the petitioner was entitled to seek a refund of IGST.

3. The Court deliberated on the accrual of statutory interest. The petitioner argued for interest from a specific date as per Section 56 of the CGST Act. The respondents opposed, citing the petitioner's inaction in correcting the declaration triggering the no-IGST refund clause. The Court noted that once the writ petition was filed, the respondents were aware of potential interest accrual. Hence, interest at the statutory rate of 6% should apply from the date of notice issued during the petition.

4. The Court allowed the writ petition, directing the respondents to refund the IGST amount with 6% interest from a specified date. The respondents were instructed to expedite the refund process. The judgment emphasized the need for necessary corrections in the web portal and instructed the parties to act based on the digitally signed copy of the judgment.

This detailed analysis covers the interpretation of the circular, entitlement to refund, application requirements, and the accrual of statutory interest as addressed in the judgment delivered by the Delhi High Court.