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TMI Blog2020 (2) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... accrued in his favour. In exports, availability of the rotation of funds is essential for the business to thrive. Moreover, businesses do not run according to the whims of the executive authorities. The business world cannot be told when to place orders for exports; when to manufacture the goods for export; and; when to actually undertake the exports. Respondents impugned circulars have thus blocked the capital of the petitioner and the unutilised ITC and it has accumulated huge amount of unutilised ITC to the tune of ₹ 30 crores. Merely because the petitioner made exports in the month of June, 2018, we do not see any justification to deny the refund of the ITC which have accumulated in the previous financial years. The Respondents cannot, artificially by acting contrary to the fundamental spirit and object of the law, contrive ways to deny the benefit, which the substantive provisions of the law confer on the tax payers. Thus, the petitioner has a strong prima facie case, and we cannot deny the petitioner of its right to claim refund which is visible from the mechanism provided under the Act. The impugned circulars take away the vested right of the taxpayer that has accr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST rules. The aforesaid paragraph reads as under: 8. The applicant, at his option, may file a refund claim for a tax period or by clubbing successive tax periods. The period for which refund claim has been filed, however, cannot spread across different financial years. Registered persons having aggregate turnover of up to ₹ 1.5 crore in the preceding financial year or the current financial year opting to file FORM GSTR-1 on quarterly basis, can only apply for refund on a quarterly basis or clubbing successive quarters as aforesaid. However, refund claims under categories listed at (a), (c) and (e) in para 3 above must be filed by the applicant chronologically. This means that an applicant, after submitting a refund application under any of these categories for a certain period, shall not be subsequently allowed to file a refund claim under the same category for any previous period. This principle / limitation, however, shall not apply in cases where a fresh application is being filed pursuant to a deficiency memo having been issued earlier. 5. Mr. Agarwal, relies upon Article 286(1) of the Constitution of India which provides that no law of state shall impose, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rules made thereunder. Section 54(1) of the CGST provides as under: Section 54 Refund of Tax (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed. (2) A specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of six months from the last day of the quarter in which such suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, there may be cases where exports may have been made in a period but no input tax credit has been availed in the said period. The above referred rule, taking into account such scenarios, defines relevant period in the context of the refund claim and does not link it to a tax period. 11.2 In this regard, it is hereby clarified that the exporter, at his option, may file refund claim for one calendar month/quarter or by clubbing successive calendar months/quarters. the calendar month(s)/ quarter(s) for which refund claim has been filed, however, cannot spread across different financial years. 9. Mr. Agarwal argues that the language of clause 11.1 indicates that respondents have acknowledged that in a situation where exports have been made in the period where no input tax credit has been availed, the relevant period in the context of refund claim cannot be linked to a tax period. He submits that despite recognising the difficulties faced by the exporters, the respondents have failed to address the scenario in which the petitioner is placed, wherein the refund claim pertains to a different financial year. Under Clause 11.2, the exporter has been given an option to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re supply has been completed for which payment had been received in advance in any period prior to the relevant period reduced by advances received for zero-rated supply of services for which the supply of services has not been completed during the relevant period; [(E) ―Adjusted Total Turnoverǁ means the sum total of the value of- (a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and (b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services, excluding- (i) the value of exempt supplies other than zero-rated supplies; and (ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both, if any, during the relevant period. ]132 (F) ―Relevant period‖ means the period for which the claim has been filed 10. For the period from November, 2017 to June, 2018 i.e. for eight months, Petitioner claims that the eligible refund in terms of the above extracted Rule 89(4) would be ₹ 2.80 crores in accordance with the figures available in the GSTR 3B return. For the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the tax period is on month to month basis. She submits that though the Government has provided for clubbing of the months and the quarters, however, under no circumstances can the refund claims spill over from one year to another. She argues that Petitioner does not have unfettered rights for claiming refund. Section 16(3) of the IGST Act, clearly stipulates that the refund is subject to conditions, and therefore, the Government is well within its jurisdiction to impose conditions by way of the impugned circular. Further, she submits that under Section 2(106) of the GST Act, the tax period has been defined to mean a period for which a return is required to be filed. The return under the Act has to be filed on a month to month basis and, therefore, the petitioner does not have any right to claim refund for one financial year, in another. 12. The matter certainly requires our consideration and we have already called upon the respondents to file a detailed counter affidavit to meet the contentions of the petitioner. However, at this stage, we are of the prima facie view that by way of the impugned circulars, though the respondents recognise the difficulties faced by the exporter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Anr. ILR (2014) II DELHI 791 wherein impugned Circular stipulating that section 27 of the Customs Act had no application was quashed, holding that Circulars can supplant but not supplement the law. Circulars might mitigate rigours of law by granting administrative relief beyond relevant provisions of the statute, however, Central Government is not empowered to withdraw benefits or impose stricter conditions than postulated by the law. Further the Constitution Bench of the Supreme Court in the case of Commissioner of Central Excise, Bolpur vs. Ratan Melting Wire Industries (2008) 13 SCC 1, it was held as under: 7. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the stat ..... 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