M/S Aim Worldwide PVT. LTD. vs. Union Of INDIA

Held

The Court held that the petitioner is entitled to the refund of IGST paid on zero-rated supplies. The Court reasoned that the petitioner had made zero-rated supplies, paid IGST, and inadvertently claimed a higher drawback. Crucially, the petitioner had rectified the error by refunding the differential drawback amount with interest, which was accepted by the respondent authorities. The Court found the respondent authorities' inaction in sanctioning the refund to be arbitrary and irrational, especially in light of the binding judicial pronouncements, including the Court's own decision in Amit Cotton Industries (Supra), which was upheld by the Supreme Court. The Court directed the respondent authorities to immediately sanction the refund of IGST. Furthermore, the Court directed the payment of interest at 9% per annum on the IGST refund amount from the date the refund bills were raised until actual payment, to be paid within eight weeks. Failure to comply would result in further interest at 9% until actual payment.

Facts

The petitioner, M/s Aim Worldwide Pvt. Ltd., filed a writ petition seeking a refund of IGST amounting to Rs. 14,94,739/- paid on goods exported as 'Zero Rated Supplies' between July 5, 2017, and August 10, 2017. The petitioner claimed that they inadvertently claimed a higher drawback amount by selecting incorrect options ('5202A' and '600699A') instead of the lower rate options ('5202B' and '600699B') while generating shipping bills. Upon realizing the mistake, the petitioner requested the Deputy Commissioner of Customs to amend the shipping bills and expressed willingness to refund the differential drawback amount. They submitted demand drafts totaling Rs. 3,39,245/- for the differential drawback and interest, which were realized by the Customs. Despite various representations, the refund of IGST remained pending.

Key Issues

1. Whether the petitioner is entitled to a refund of IGST paid on zero-rated supplies, despite having claimed a higher drawback amount due to an inadvertent error in the shipping bills, and having subsequently refunded the differential drawback amount. Petitioner's Arguments: The petitioner argued that the supplies were zero-rated under Section 16 of the IGST Act, and they had paid IGST. They contended that Rule 96 of the CGST Rules, 2017, deems the shipping bill as an application for refund. They highlighted their inadvertent mistake in selecting the wrong drawback codes and their subsequent action to rectify it by refunding the differential amount. They relied on their GSTR-1 and GSTR-3B filings and the fact that the differential drawback amount with interest was paid and realized. They also cited the case of Amit Cotton Industries (Supra) and E.I. Dupont India (P) Ltd. Vs. Union of India. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or respondent authorities.