2023 (11) TMI 1113 - HC - GST

Refund of accumulated Input Tax Credit (ITC) - Turnover of Zero-rated supplies - mistake in submission of documents through common portal while filing applications in form GST RFD -01 - GST officer observed that, Shipping bills were not signed by appropriate authorities or obtained sanctioned from higher official as such those shipping bills cannot be accepted as valid proof of export - HELD THAT - The applicant has uploaded the documents which are required by the Circular. Only mistake was made by the petitioner is that he had uploaded the quadruplicate copy of the shipping bills which was countersigned by the Inspector of Customs. Subsequently, when it came to know about the anomalies, the petitioner has submitted the triplicate copy which was countersigned by the Superintendent of Customs before the Authority for consideration but without considering the same the respondent no. 2, has filed the appeal against the sanctioned order of refund issued by the adjudicating officer without verifying the said shipping bills from the Customs Department. Appellate authority has also not considered all these aspects while coming to a final conclusion - Accordingly, judgement and order dated 12.12.2022 passed by the Appellate Authority under Section 107 (2) of the GST Act is hereby set aside. Respondent No. 4 is directed to reconsider the issue after thorough scrutiny of documents and verification of shipping bills submitted by the writ petitioner and shall take afresh decision within four months from this date after consulting with all other relevant departments concerned. Respondent No. 4 shall also give an opportunity being heard to the petitioner or his authorized representatives. No coercive action shall be taken against the writ petitioner by the respondents concerned till the final decision. Petition disposed off by way of remand.

Summary

Issues Involved:
1. Validity of the refund sanction order considering FOB values of shipping bills cleared by unauthorized officers.
2. Procedural errors in the clearance of shipping bills.
3. Entitlement to refund of accumulated Input Tax Credit (ITC).

Summary:

Issue 1: Validity of Refund Sanction Order
The petitioner filed a writ petition against the appellate authority's partial allowance of an appeal, which found the refund sanction order erroneous for considering FOB values of twelve shipping bills cleared by an unauthorized officer, contrary to Section 51 of the Customs Act, 1951, and Rule 89(4) of the CGST Rules, 2017. The appellate authority upheld the refund sanction order for three shipping bills dated 17.03.2021.

Issue 2: Procedural Errors in Clearance of Shipping Bills
The petitioner, a registered company under the GST Act, applied for a refund of accumulated ITC for the period January 2021-March 2021. The refund was sanctioned but later challenged by the respondents, who claimed that 12 shipping bills were cleared by an unauthorized Inspector of Customs and 3 by the Superintendent of Customs without the required approval from AC/DC of Customs. The petitioner argued that these procedural errors were not their fault and that they should not be penalized for the actions of Customs officers.

Issue 3: Entitlement to Refund of ITC
The petitioner contended that they had correctly exported goods and submitted the required documents, including triplicate copies of shipping bills signed by the Superintendent of Customs. They argued that the procedural irregularities were internal issues of the Customs Department and should not affect their entitlement to the refund. The court found that the petitioner had indeed exported the goods and that the procedural errors were not within their control.

Judgment:
The court set aside the appellate authority's order, directing respondent No. 4 to reconsider the issue after thorough scrutiny of documents and verification of shipping bills. The respondent must make a fresh decision within four months, giving the petitioner an opportunity to be heard and consulting relevant departments. No coercive action shall be taken against the petitioner until a final decision is made. The court emphasized that the final decision should be reasoned and on merit, uninfluenced by its observations.

The writ petition was disposed of with no order as to costs. Urgent certified copies of the judgment may be provided upon compliance with formalities, and all parties shall act on the server copy of the order downloaded from the court's official website.