M/S. Swastik International vs. Union Of INDIA
Original PDF →Facts
The petitioner, M/s. Swastik International, filed a writ application seeking a mandamus to direct the respondent authorities to sanction the refund of IGST amounting to Rs. 5,81,199/- for goods exported under specific shipping bills. The petitioner also sought interest at 18% on the withheld refund. The petitioner contended that the refund was arbitrarily and illegally withheld. The Deputy Commissioner (IGST), Mundra, had communicated a refusal based on CBIC Circular No. 37/2018 dated 09.10.2018. The High Court had previously issued notice to the respondents, noting that the issue was covered by its own judgments in Amit Cotton Industries, M/s. Vimala Food Products, and M/s. Aim Worldwide Pvt. Ltd., and expressed displeasure at the department's stance.
Held
The High Court disposed of the writ application as the petitioner's counsel, Mr. D. K. Trivedi, made a statement that the refund had been sanctioned and paid to his client along with 9% interest. Therefore, the writ application no longer needed to be adjudicated on merits. The Court took serious note of the high-handed attitude of the officer in defiance of previous judgments. While the petitioner had sought 18% interest, the refund was ultimately paid with 9% interest, as indicated by the counsel's statement. The Court had previously expressed that the issue was squarely covered by its own decisions and that the department's stance was unreasonable and potentially contemptuous. The operative direction was to dispose of the petition in light of the refund being paid.
Key Issues
1. Whether the respondent authorities acted illegally and arbitrarily in withholding the refund of IGST amounting to Rs. 5,81,199/- for zero-rated supplies (exports) made by the petitioner, contrary to established High Court judgments? 2. Whether the petitioner is entitled to interest at 18% on the withheld IGST refund amount from the date of the shipping bill until the date of payment? Petitioner's Arguments: The petitioner argued that the refund was illegally withheld despite clear pronouncements by the High Court in similar cases, such as Amit Cotton Industries Vs. Principal Commissioner of Customs, M/s. Vimala Food Products Vs. Union of India, and M/s. Aim Worldwide Pvt. Ltd. Vs. Union of India. They sought mandamus for immediate sanction of the refund and payment of interest at 18% due to the arbitrary and illegal withholding by the respondent authorities. Revenue's Arguments: The judgment does not record specific arguments from the revenue or state. However, the communication from the Deputy Commissioner (IGST) indicates reliance on CBIC Circular No. 37/2018 dated 09.10.2018 as the basis for withholding the refund.
Sections Cited
Article 226
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1 By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs: “A. Your Lordships may be pleased to admit this petition; B. Your Lordships may be pleased to allow this petition; C. Your Lordships may be pleased to issue writ of mandamus or any other appropriate writ directing the respondent authorities to immediately sanction the refund of IGST aggregating to Rs.5,81,199/- paid in regard to the goods (Agro Food Products & Species) exported i.e. ‘Zero Rated Supplies’ made vide aforesaid shipping bills; D. Your Lordships may be pleased to direct the respondent authorities to pay interest @ 18% to the petitioner herein on the amount of refund of IGST mentioned hereinabove from the date of shipping bill up till the date on which the amount of refund is paid to the petitioner herein, as the same is arbitrarily and illegally withheld by the respondent authorities; E. Your Lordships may be pleased to grant an ex-parte, ad interim order in favour of the petitioner herein in terms of prayer clause ‘C’ and C/SCA/20307/2021 ORDER DATED: 01/04/2022 ‘D’ hereinabove; F. Since the petitioner are constrained to approach Your Lordships by way of this petition only because of illegal act of respondent authorities, Your Lordships may be pleased to direct the respondent authorities to pay a cost of this litigation to the petitioner herein; G. Your Lordships may be pleased to grant such other and further relief/(s) that may be deemed fit and proper in the interest of justice in favor of the petitioner.” 2 On 6th January 2022, this Court passed the following order:
“1. We have heard Mr. D.K. Trivedi, learned counsel appearing for the (Guj.), which has been later followed in the case of M/s. Vimala Food decided on 22.12.2021, and in the case of M/s. Aim Worldwide Pvt. No.37/2018 dated 09.10.2018. 3. The Deputy Commissioner (IGST), Mundra, owes an explanation as to why despite there being a direct judgment of this High Court on the point in question duly affirmed by the Supreme Court such unreasonable stand is being taken, which is nothing short of contempt. We take notice of the fact that because of such attitude on the part of the Department, a Coordinate Bench of this Court in the case of M/s. Aim Worldwide Pvt. Ltd. (Supra) and M/s. Vimala Food Products Ltd. (Supra), to which one of us (Nisha M. Thakore J.) was a party, directed the refund of the amount towards the IGST along with interest @ 9%. We take serious note of such high handed attitude on the part of the Officer in defiance of the judgments of this Court.
Let Notice be issued to the respondents for final disposal returnable on 19.01.2022. Direct service to the respondent Nos.2 and 3 is permitted and the respondent No.1 Union of India shall be served by Email.” C/SCA/20307/2021 ORDER DATED: 01/04/2022 3 We have hard Mr. D. K. Trivedi, the learned counsel appearing for the writ applicant and Mr. Nikunt Raval, the learned Standing Counsel appearing for the respondents. 4 Today, when the matter was taken up for hearing, Mr. Trivedi made a statement that this writ application need not now be adjudicated on merits as the refund has been sanctioned and paid to his client with 9% interest. 5 In view of the aforesaid statement made by Mr. Trivedi, we dispose of this writ application accordingly. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) CHANDRESH
Reproduced from the public record of the Gujarat High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.