Src Chemicals Private Limited And Anr vs. Central Board Of Indurect Taxes And Customs Thr. Dept. Of Revenue And Ors

Held

The Court allowed the petition, directing the respondents to refund the Integrated Goods and Service Tax (IGST) of Rs. 22,92,587 to Petitioner No. 1 within four weeks, along with interest at 9% per annum from the filing date of the petition (April 28, 2021), and costs of Rs. 25,000. The Court reasoned that the respondents had ample opportunity to file a reply and comply with previous court directions but failed to do so. Furthermore, the communication from the Assistant Commissioner of Customs indicated that the petitioner was entitled to the refund, but the delay was solely due to the non-transmission of data from GSTN to ICEGATE, which is the responsibility of the respondents, particularly Respondent No. 6. The Court emphasized that this technical issue should not be the petitioner's burden, especially after more than 4.5 years since the amount was paid. The Court issued a Writ of Mandamus directing the refund, irrespective of whether the relevant data had been transmitted from GSTN to ICEGATE, citing Section 54 of the CGST Act, 2017, and Section 16 of the IGST Act, 2017.

Facts

Petitioner No.1, SRC Chemicals Private Limited, exported goods on June 28, 2017, and paid IGST of Rs. 22,92,587. The provisions for refund and calculation of IGST under the CGST and IGST Acts had not yet been notified on that date. Due to a system transition at Jawaharlal Nehru Port, the shipping bill, which should have been printed on June 28, 2017, was printed on July 1, 2017, with Petitioner No.1's GSTIN and a levy of IGST dated June 29, 2017. The petitioner claims no control over the shipping bill printing process. The petitioner chose to pay IGST and claim a refund, which is reflected in its IGST returns. A Customs Circular indicated that the shipping bill itself would be deemed an application for refund. When the refund was not received, the petitioner was informed that the refund could not be processed as export data was not transmitted from GSTN to ICEGATE, a process beyond the petitioner's control. Subsequently, the petitioner filed a refund application in Form GST RFD-01A, which was rejected by Respondent No. 3, and an appeal to the Commissioner of Central Tax (Appeals-II) Pune was also rejected, stating jurisdiction lay with the Customs Department. Despite communications and court orders, the refund remained unprocessed.

Key Issues

1. Whether the Petitioner is entitled to a refund of IGST amounting to Rs. 22,92,587 paid on exports made on June 28, 2017, despite the shipping bill being printed on July 1, 2017, with IGST levied, and the relevant refund provisions not being notified on the export date, as per the CGST Act and IGST Act? Petitioner's arguments: The petitioner contends that the IGST was paid on a date when the refund provisions were not notified, and the delay in printing the shipping bill was due to port system transition, beyond their control. They rely on Circular No. 26/2017-Customs, which deemed the shipping bill as a refund application. They argue that the non-transmission of data from GSTN to ICEGATE is a respondent's responsibility and should not prejudice their refund claim. Revenue's arguments: The respondents did not file a reply, and therefore, did not controvert the petitioner's averments. The Court noted that the respondents had sufficient time to file a reply and comply with court directions.