Gujarat Nippon International PVT. LTD. vs. The Union Of INDIA And Ors

Held

The Court held that the Petitioner succeeds in its claim for the refund. The reasoning was based on the fact that the Petitioner had exported goods on payment of integrated goods and service tax and was claiming a drawback only for the custom component at the specified rates. Crucially, the Court noted that the rates of drawback under column 'A' and 'B' for the product exported by the Petitioner were the same, a fact not disputed by the Respondents. The denial of the refund was therefore based solely on a technical ground (the suffix 'A'). The Court found this situation similar to the case of Awadkrupa Plastomech Pvt. Ltd. vs. Union of India, which was confirmed by the Apex Court. The ratio decidendi is that a refund should not be denied on a technicality when the substance of the claim is valid and the rates are identical, especially when supported by precedent. The operative direction was for the Respondents to sanction the refund towards IGST paid in respect of the goods exported, with statutory interest to follow if there were no other impediments.

Facts

The Petitioner, Gujarat Nippon International Pvt. Ltd., sought a direction from the Bombay High Court to sanction a refund of Rs. 17,45,941/-. This refund was claimed under Section 16(3)(b) of the IGST Act, read with Section 54 of the CGST Act and Rule 96 of the CGST Rules. The Petitioner had exported goods on payment of integrated goods and service tax. The refund was denied by the revenue authorities on the ground that the Petitioner had mistakenly used the suffix 'A' instead of 'B' in its drawback claim, which they interpreted as claiming a higher drawback. The Petitioner contended that the drawback claimed was the same as the custom component and that the rates in column 'A' and 'B' were identical for their exported products, a fact not disputed by the Respondents. The Petitioner relied on the Gujarat High Court judgment in Awadkrupa Plastomech Pvt. Ltd. vs. Union of India, confirmed by the Apex Court.

Key Issues

1. Whether the Petitioner is entitled to a refund of Rs. 17,45,941/- under Section 16(3)(b) of the IGST Act, Section 54 of the CGST Act, and Rule 96 of the CGST Rules, despite using the suffix 'A' in its drawback claim. The Petitioner argued that it had not claimed a higher drawback and that the suffix 'A' was a mistake, with the actual drawback claimed being equivalent to the custom component. They asserted that the rates in column 'A' and 'B' were the same for their exported goods, and relied on the Gujarat High Court's decision in Awadkrupa Plastomech Pvt. Ltd. vs. Union of India, upheld by the Apex Court, which dealt with similar circumstances. The Respondents contended that the use of suffix 'A' was sufficient to infer a claim for higher drawback and that a circular dated 09.10.2018 indicated that exporters using suffixes 'A' or 'C' consciously relinquished their IGST/ITC claims, thus disentitling the Petitioner to the refund.