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TMI Blog2023 (7) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... ame by the respondent authority on its own merits and in accordance with law. Reference made to the decision rendered by the Hon ble Supreme Court in the case of UNION OF INDIA ORS. VERSUS VKC FOOTSTEPS INDIA PVT LTD. [ 2021 (9) TMI 626 - SUPREME COURT ], wherein the Hon ble Supreme Court has an occasion to deal with the issue where the High Court has expanded the provision for refund beyond what the legislature has provided, and therefore, the aforesaid decision would not render any assistance to learned AGP in the facts of the present case. It is settled law that the benefit which otherwise a person is entitled to once the substantive conditions are satisfied cannot be denied due to a technical error or lacunae in the electronic system - the petitioner has no option but to upload the supplementary application under any other category for the refund of the left out amount, which was due to an arithmetical error committed by the employee of the petitioner - the said claim of the petitioner for refund of the left out amount of Rs. 10,20,28,733/- cannot be rejected outright merely on technicality and that too when the substantive conditions are satisfied without scrutiny by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n manufacturing, trading and supplying/selling sugar and allied products. The petitioner has been selling and supplying such goods within the country and also exporting substantial quantities of goods to foreign countries. It is stated that petitioner has been importing materials like raw sugar under Advance Authorization Scheme. Such imports are allowed to be made under exemption of integrated tax because import duties including integrated tax are exempt when such materials are imported under a valid Advance Authorization. The petitioner would process raw sugar in their refineries and refined sugar so produced is sold in the domestic market as well as exported to foreign countries. It is stated that the supplies made in the domestic market are always on payment of GST at appropriate rate, whereas the exports are made under Bond without payment of integrated tax on exported refined sugar. 3.2. It is stated that exports made by the petitioner are in the nature of zero-rated supplies as contemplated under Section 16 of the Integrated Goods and Services Tax Act, 2017 ( IGST Act for short). It is further stated that since such zero-rated supplies are made without payment of tax, ITC av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CGST Act. Thereafter, learned counsel has referred the provisions contained in Rule 89 of CGST Rules and also referred the document produced at page 48 of the compilation i.e. Form GST RFD 01, i.e., the Application for Refund. At this stage, learned advocate has also referred the statement produced at page 57 of the compilation. Learned advocate Mr. Dave submitted that the total refund that the petitioner had been entitled to for these 11 months in respect of export of goods without payment of tax (accumulated ITC) in accordance with the formula of Rule 89(4) of the Rules is Rs. 1,10,67,67,172/-, however, there was an error in showing the refund amount which resulted in total refund amount being shown as Rs. 1,00,47,38,439/-, and therefore, a sum of Rs. 10,20,28,733/- remained to be shown in the applications as refund amount. Learned advocate referred the statement produced at page 57 of the compilation in support of the said contention. 5.1. Learned advocate for the petitioner, therefore, submitted that the amount of refund claimed by the petitioner was lower than what was actually admissible to the petitioner because of accumulated ITC involving zero rated supplies. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferential amount. 5.5. Learned advocate Mr. Dave would further submit that in the CGST Act, a refund application has to be filed on the common portal and in the format prescribed by the Government. In such prescribed form of application, the assessee is required to disclose grounds of refund claim with the category under which refund was claimed and the assessee is obliged to fill in such details against serial No.7 of the refund application. In the present case, the petitioner claimed refund of accumulated ITC in respect of export of goods without payment of tax, and therefore, such category was declared while lodging the refund application initially. The said refund application has been sanctioned and paid also by the respondent No. 2. However, another application for remaining amount of refund or for supplementary claim for the same category of accumulated ITC is not possible to be uploaded on the common portal because another application for the same month under the same category of accumulated ITC for export of goods without payment of tax is not accepted on the common portal, and therefore, the petitioner had no option but to upload the supplementary application under any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular dated 3rd October, 2019, the Government of India provided certain clarifications on the eligibility to file a refund application in form GST RFD-01 for a period and category under which NIL Refund Application has already been filed. Learned AGP has referred Clause 3 of the said Circular and submitted that as per the said Clause no refund claims in Form GST RFD-01A/RFD-01 must have been filed by the registered person under the same category for any subsequent period. 6.2. It is submitted that in the case of the petitioner, after claiming the ITC refund once for each of the specified period, the petitioner submitted supplementary refund application in any other category. It is submitted that for the said period, the petitioner had already claimed ITC refund and therefore the claim of the petitioner is rightly rejected by the respondent and thereby the respondent has not committed any error. Learned AGP, therefore, urged that this petition be dismissed. 6.3. Learned AGP has placed reliance upon the decision rendered by the Hon ble Supreme Court in the case of Union of India Others v. VKC Footsteps India Private Ltd., reported in (2022) 2 SCC 603. 7. Having heard the learned advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner. 9. At this stage, we would like to refer to the relevant provisions of law. Sub-Sections (3) and (14) of Section 54 of the CGST Act provides as under: 54. Refund of tax. (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than- (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. xxx xxx xxx (14) Notwithstanding anything contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of such judgment, decree, order or direction; 8[(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises;] (f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof; (g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and (h) in any other case, the date of payment of tax. 9.1. Section 16 of the IGST Act reads as under: 16. (1) zero rated supply means any of the following supplies of goods or services or both, namely: (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. [(3) A registered person making zero rated supply shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing or the value which is 1.5 times the value of like goods domestically supplied by the same or, similar placed, supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under subrule (4A) or (4B) or both; (D) Turnover of zero-rated supply of services means the value of zero-rated supply of services made without payment of tax under bond or letter of undertaking, calculated in the following manner, namely:- Zero-rated supply of services is the aggregate of the payments received during the relevant period for zero-rated supply of services and zero-rated supply of services where 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 Turnover 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 claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected without examining the same by the respondent authority on its own merits and in accordance with law. 12. At this stage, we would like to refer to the decision rendered by the Hon ble Supreme Court in the case of VKC Foodsteps India Private Limited (supra), wherein the Hon ble Supreme Court observed in para 88, 99 and 142 as under: 88. The jurisprudential basis furnishes a depiction of an ideal state of existence of GST legislation within the purview of a modern economy, as a destination-based tax. But there can be no gain saying the fact that fiscal legislation around the world, India being no exception, makes complex balances founded upon socio-economic complexities and diversities which permeate each society. The form which a GST legislation in a unitary State may take will vary considerably from its avatar in a nation such as India where a dual system of GST law operates within the context of a federal structure. The ideal of a GST framework which Article 279A(6) embodies has to be progressively realized. The doctrines which have been emphasized by Counsel during the course of the arguments furnish the underlying rationale for the enactment of the law but cannot furnish ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund would be admissible only where the unutilised ITC has accumulated on account of the rate of tax on inputs being higher than the rate of tax on output supplies, Parliament has confined the refund in the manner which we have described above. While recognising an entitlement to refund, it is open to the legislature to define the circumstances in which a refund can be claimed. The proviso to Section 54(3) is not a condition of eligibility (as the assessees Counsel submitted) but a restriction which must govern the grant of refund under Section 54(3). We therefore, accept the submission which has been urged by Mr N Venkataraman, learned ASG. 142. The above judicial precedents indicate that in the field of taxation, this Court has only intervened to read down or interpret a formula if the formula leads to absurd results or is unworkable. In the present case however, the formula is not ambiguous in nature or unworkable, nor is it opposed to the intent of the legislature in granting limited refund on accumulation of unutilised ITC. It is merely the case that the practical effect of the formula might result in certain inequities. The reading down of the formula as proposed by Mr Natar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h that occurred as regards furnishing the GSTR 6 return for recording and distributing the ISD credit of Rs. 20,52,989/-. As usual, there is no response at the end of the GSTN. The writ applicant is not allowed to distribute the ISD credit of Rs. 20,52,989/- as the same has not been recorded, reported and declared in the GSTR 6 return. xxx xxx xxx 11. For all the aforegoing reasons, this petition succeeds and is hereby allowed. The respondents are directed to allow the writ applicant to furnish manually the GSTR 6 return with details of the ISD credit of Rs. 20,52,989/- and also permit distribution of such credit to the constituents of the writ applicant. Let this entire exercise be undertaken within a period of six weeks from the date of the receipt of writ of this order. 13.2. In the case of M/s. Stitchwell Garments (supra), the Division Bench of this Court observed and held in para 5.2 to 5.4 and 6 as under: 5.2 The entitlement of the petitioner for availment under export scheme is not in dispute. Entering a particular code to receive the benefit was only part of procedure. It could not overreach or obliterate the substantive right claimable by the petitioner once the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that particular course of proceedings which, conformable with the practice of the court, ought to have been observed . 6. In the aforesaid view, the petition deserves to be allowed. Resultantly, the decision of Respondent Director General of Foreign Trade reflected in email communication dated 10.06.2021 refusing to change the Scheme Code from 19 to 60 in EDI shipping bills is hereby set aside. Respondents no. 1 and 2 herein are directed to accept the application of the petitioner for export benefits under the Scheme of Rebate of State and Central taxes and Levies (RoSCTL) in respect of 70 shipping bills referred to in order dated 04.01.2021, the Principal Commissioner of Customs, Customs House, Mundra. The acceptance of the petitioner's application may be by manual mode if the system does not permit the correction. The application of the petitioner for the above purpose shall be deemed to have been filed with Code 60. 14. Keeping in view the aforesaid decisions, it is settled law that the benefit which otherwise a person is entitled to once the substantive conditions are satisfied cannot be denied due to a technical error or lacunae in the electronic system. As discussed here ..... X X X X Extracts X X X X X X X X Extracts X X X X
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