M/S Nuvteq Solutions Private Limited vs. The Joint Commissioner Of Commercial Taxes
Original PDF →Facts
The petitioner's appeal against an adjudication order confirming GST demand on 'export services' was rejected on the ground of limitation. The petitioner contended that their services qualified as 'zero-rated' supplies, and the demand was confirmed solely due to the non-furnishing of a Letter of Undertaking (LUT), seeking a refund of the recovered amount.
Held
The High Court quashed both the adjudication order and the appellate order, finding that the authorities failed to consider the nature of the transaction as zero-rated supply and the possibility of furnishing LUT ex post facto. The proceedings were restored to the original authority for reconsideration on jurisdiction and entitlement to refund, allowing the petitioner to submit the LUT.
Key Issues
Whether GST demand can be confirmed on 'zero-rated' export services solely due to non-furnishing of a Letter of Undertaking (LUT), and if the appellate authority erred in dismissing the appeal on limitation without considering the merits.
Sections Cited
Section 73(9), Section 61, Section 50, Section 107(11), Section 2(6), Rule 96A
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
The petitioner has filed its appeal in GST Appeal No.560/25-26 being aggrieved by the Adjudication Order dated 28.08.2024 [Annexure-B] under Section 73[9] of the Karnataka Goods and Services Tax Act/Central Goods and Services Tax Act, 2017 [for short, ‘the Act’] and the relevant provisions thereof. The appeal is rejected by the Order dated 12.06.2025 [Annexure-A] on the ground of limitation. The petitioner contends that the respondents have recovered a sum of Rs.72,08,960/- because of a procedural lapse, the petitioner seeks a refund of this amount.
Sri Dhruv M Patwari, the learned counsel for the petitioner, submits that this Court must intervene on the ground of juri iction and also in view of the orders of this Court in the writ petition in W.P. No.11076/2024. In elaboration, the learned HC-KAR NC: 2026:KHC:27903 counsel submits that the petitioner's transaction qualifies as ‘export services’ under Section 2[6] of the Act and is therefore a ‘zero rate’ supplies but the second respondent has confirmed a Demand for CGST/KGST only on the ground that the petitioner has not furnished a Letter of Undertaking in the prescribed form. Sri K Hemakumar, the learned Additional Government Advocate, is heard in the light of these grounds and the records are perused.
It remains indisputable that the second respondent had to consider the nature of the transaction in the light of the relevant provisions, and that there is a failure on this score. Further, this Court, in very similar circumstances, considering the terms of the Circular dated 15.03.2018, has opined thus. “As can be seen from the aforesaid Circular, non-furnishing/non-submission of LUT/Bond in terms of Rule 96-A of the CGST Rules is not an incurable defect nor can the HC-KAR NC: 2026:KHC:27903 same be said to be mandatory especially when the respondents themselves have permitted the petitioner to file such LUTs/bonds even subsequent to export and the same is permitted to be allowed on ex post facto basis taking into account facts and circumstances of each case including the purpose for availing refund as sought for by the petitioner. However, the respondent No.1 while rejecting refund claim of the petitioner has neither considered nor appreciated the said Circular dated 15.03.2018 and consequently, I deem it just and appropriate to set aside the impugned refund rejection order dated at Anenxure-Z5 and remit the matter back to the first respondent for reconsideration afresh in accordance with law.”
It follows from this exposition that a request for refund must be based on a Letter of Undertaking furnished to justify a claim for refund. As neither of these two aspects is considered, this Court is of the view that there must be interference quashing both the impugned Order of Adjudication dated 28.08.2024 and the Order in Appeal in HC-KAR NC: 2026:KHC:27903 GST.Appeal No.560/2025-26 [Annexures - A and B], restoring the proceedings to the second respondent for reconsideration on the ground of juri iction as also the petitioner's entitlement to refund based on the Letter of Undertaking and the second respondent must decide expeditiously, and in any event within eight [8] weeks from the date of receipt of a certified copy of this order. Hence the following: ORDER [a] The petition is allowed in part quashing the impugned Adjudication Order dated 28.08.2024 and the Order in Appeal in GST. Appeal No.560/2025-26 [Annexures - A and B] restoring the proceedings to the second respondent with liberty to the petitioner to file a certified copy of this order within a week from the date of receipt thereof. HC-KAR NC: 2026:KHC:27903 [b] The second respondent is directed to dispose of the proceedings within eight [8] weeks from the date of receipt of a certified copy of this order by a reasoned order permitting the petitioner to place the Letter of Undertaking. (B M SHYAM PRASAD) JUDGE
AN/-
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.