M/S Ness Digital Engineering (INDIA) PVT LTD. vs. Assistant Commissioner Of Central Tax

Held

The Court held that if the petitioner can demonstrate that the invoices relate to exports from Bengaluru and the remittances were received by its Bengaluru bankers, there is no valid reason to reject the refund solely based on the address mentioned in the FIRCs, which reflects the DGFT registration address. The Court found that the first respondent had not considered these circumstances. Therefore, the Court quashed the impugned order and directed the first respondent to reconsider the refund application. The petitioner was granted liberty to submit a reconciliation of invoice numbers, corresponding remittances, and related FIRCs. The first respondent was directed to consider this reconciliation, potentially after granting a personal hearing, and communicate its decision within eight weeks.

Facts

The petitioner, M/s Ness Digital Engineering (India) Pvt. Ltd., filed a writ petition challenging an order dated 08.05.2026, which rejected its refund claim of Rs. 6,07,00,190/-. The rejection was based on the observation that while the petitioner is registered in Karnataka, the Foreign Inward Remittance Certificates (FIRCs) indicated that the export of services originated from Maharashtra. The Assistant Commissioner of Central Tax, the first respondent, noted that the petitioner had not sufficiently established the GSTIN-wise nexus with export proceeds. The petitioner contended that its exports were from Bengaluru, remittances were received by its Bengaluru bankers, and the FIRCs reflected its Maharashtra address due to its Directorate General of Foreign Trade (DGFT) registration being based there. The petitioner argued that this discrepancy was overlooked by the respondent.

Key Issues

1. Whether the rejection of the refund claim is arbitrary and illegal solely on the ground of discrepancies in the FIRCs regarding the location of export, when the petitioner claims the exports and remittances are from Bengaluru? (Question of law and mixed fact and law, turning on Section 54 of the CGST Act, 2017 and Rule 89 of the CGST Rules, 2017). Petitioner's arguments: The petitioner argued that its exports and remittances were from Bengaluru, and the FIRCs showing a Maharashtra address were due to its DGFT registration. It relied on the High Court's decision in M/s. Nokia Solutions and Networks India Pvt. Ltd. Vs. The Principal, Commissioner of Central Tax, etc., to contend that refusing a refund due to minor errors in FIRCs is arbitrary and illegal. Revenue's arguments: The revenue's counsel could not dispute that the refund was rejected without examining whether the FIRCs corresponded to invoices raised for export from Bengaluru and remittances received in Bengaluru. The revenue did not present any counter-arguments regarding the petitioner's claim of Bengaluru-based exports and remittances.