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2024 (11) TMI 1330 - HC - GSTRefund of IGST on ocean freight - Constitutionality of N/N. 8/2017 and N/N. 10/2017 dated 28.06.2017 - HELD THAT - The issue of levy of IGST on ocean freight is no longer res integra and has decided by the Hon ble Apex Court in case of UNION OF INDIA ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR 2022 (5) TMI 968 - SUPREME COURT and the decision of various High Courts including this Court in case of BLA COKE PVT. LTD. VERSUS UNION OF INDIA ORS. 2024 (10) TMI 492 - GUJARAT HIGH COURT , wherein, it has been categorically held that when the Notification itself is struck down, the respondent-authorities cannot insist for levy of IGST on the amount of ocean freight. Such being the position, the main issue falls for determination of this Court is whether the prayers for refund of the amount of levy are maintainable and whether this Court must direct the respondents to refund the same to the petitioner. In case of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT , the Apex Court has gone on to hold that for the first type of cases namely unconstitutional levy, the remedy of writ jurisdiction exists, both under Articles 32 and 226 of the Constitution of India respectively. The writ petition filed by the petitioner seeking refund of the IGST is maintainable and must be allowed as the levy has been held to be unconstitutional. Impugned order is hereby quashed and set aside - The petition, therefore, succeeds and is accordingly allowed.
Issues:
1. Eligibility for refund of IGST on ocean freight. 2. Validity of the rejection of the refund claim. 3. Maintaining the refund application within the statutory period. Analysis: Issue 1: Eligibility for refund of IGST on ocean freight The Court addressed whether the petitioner is entitled to a refund of IGST on ocean freight paid during June 2018, following the striking down of relevant Notifications by previous judgments. The petitioner filed a refund claim for the period in question, citing unutilized GST on Ocean Freight under Reverse Charge Mechanism. The respondent rejected the claim based on delay, but the petitioner argued that the claim could not be rejected due to the judgment of the Hon'ble Apex Court. The Court referred to previous decisions and held that the petitioner's application for refund was not time-barred and was maintainable, given the circumstances. Issue 2: Validity of the rejection of the refund claim The respondent rejected the petitioner's refund claim, citing that it was beyond the statutory period of two years from the relevant date. Despite the petitioner's detailed response and appeal, the claim was dismissed on the same ground. The Court analyzed the situation in light of previous judgments and found that the rejection of the refund claim was not justified, especially considering the unconstitutional levy of IGST on ocean freight. Issue 3: Maintaining the refund application within the statutory period The Court emphasized that the petitioner filed the refund application promptly after the relevant Notification was struck down and the Union of India's appeal was dismissed in 2022. It was held that the application for refund was made within a reasonable time and was not time-barred. The Court concluded that the writ petition seeking a refund of IGST was maintainable and allowed the petition, quashing the impugned order and setting it aside. In conclusion, the Court ruled in favor of the petitioner, allowing the refund of IGST on ocean freight and declaring the levy as unconstitutional. The judgment highlighted the importance of timely refund applications in cases of unconstitutional levies and emphasized the petitioner's right to seek a refund in such circumstances.
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