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2024 (4) TMI 462 - HC - GSTRefund of IGST on goods exported - Petition challenged the Order for refusal to grant refund - Non-alignment of export data between the ICEGATE Portal maintained by the Customs Department and the Common Portal - whether the petitioner at the relevant time, on presentation of the shipping bills in regard to the confirmed sales, was entitled to refund of the IGST amounts, paid on the goods - HELD THAT:- It may also be observed that the obvious implication as brought about by Rules 96 and 96A as may be applicable and the statutory Scheme which permitted the petitioner to make payment of IGST after the exports were undertaken, has been completely overlooked by respondent Nos. 3 and 4. Once confirmation of the sale was evident from the shipping bills as presented by the petitioner, which were in relation to the goods on which IGST was paid, and the confirmed sales admittedly being zero rated supplies, there was no question of respondent Nos. 3 and 4 retaining the IGST amounts paid on such confirmed sales. The presentation of shipping bills as per the requirement of Rules 96 / 96A, which were squarely applicable, itself entitled the petitioner to refund of the IGST amount based on the principles of “zero rated supplies” as recognized u/s 16 of the IGST Act. Thus, there was no question of the circular dated 18 July 2019 being made applicable to the petitioner and/or confining the petitioner to a procedure of refund application to be filed u/s 54. Hence to compel the petitioner to file the refund application at a belated stage and after a long period of the shipping bills being presented by the petitioner (being itself a refund application) and thereafter, to hold that the refund application filed u/s 54 is time barred, was wholly illegal and unwarranted in the facts and circumstances of the case. Thus, the entire approach of respondent Nos. 3 and 4, not only in denying the refund to the petitioner, but also compelling the petitioner to apply for a refund under the said circular which was issued subsequent to the shipping bills being presented, was a patent illegality. This more particularly when respondent Nos. 5 and 6 (Custom Authorities) had clearly confirmed the export and re-imports thereby confirming the sales to the foreign parties, in respect of which respondent Nos. 3 and 4 have not raised any dispute. It is stated that respondent no. 6 is not the competent authority to sanction or reject the IGST claim. It is, hence, clear that both the authorities are disowning their obligation and/or authority to refund the IGST as paid by the petitioner while not denying that the petitioner was entitled to the refund. The position is something which is not only disturbing but a shocking state of affairs in the authorities inter se not resolving such issues. We also do not find that any attempt was made to resolve the issues by both the parties. Any internal or departmental conflicts cannot cause prejudice to the assessee. Such approach on the part of the authorities is certainly not conducive to international trade and commerce. Considering the clear position in law in the present case, the petitioner was entitled to the refund of the IGST amounts. We are of the opinion that in cases where exports involving payment of IGST are concerned, in which refund applications are made, a special mechanism is required to be devised so that both electronic portals are compatible, and refund of duties, which could not be retained, are processed expeditiously and the assessees do not suffer on account of ineffective systems being followed by the CGST as also the Customs Authorities. Although some circulars are issued to clarify the position, however, no effective steps are being taken to appreciate the core issues as involved in each of such cases and refunds are not being processed. The present case is a clear example of such confusion. Unless the loose ends on such issues are tied up and a robust mechanism is immediately created and implemented, trade and commerce would continue to suffer. Interest - In facts of the case, certainly the petitioner would be entitled to interest as the amount has been illegally retained by the respondents without authority in law. Considering the position in law as prescribed under the GST Laws and the constitutional principles as evolved in several decisions, the assessees were held to have become entitled to alongwith appropriate interest. In a similar situation, the Division Bench of Gujarat High Court in M/s. Vimla Food Products vs. Union of India & Ors. [2021 (12) TMI 1328 - GUJARAT HIGH COURT] and concerning a supply which was “zero rated supply” referring to the decision in Amit Cotton Industries Vs. Principal Commissioner of Customs [2019 (7) TMI 472 - GUJARAT HIGH COURT] as also to the relevant circulars and notifications and the decisions of the Court in that regard, had held that the petitioner was entitled to interest at the rate of 9% from the date on which the bills for refund of IGST were raised by the petitioner, till its actual payment. In our opinion, the petition needs to succeed. It is accordingly allowed in terms of the following order:- (i) The impugned Circular dated 18 July, 2019 is declared to be not applicable to the petitioner’s refund applications / claim; (ii) The petition stands allowed in terms of prayer clauses (b), (c), (d) and (e). (iii) The rejection of the refund applications by the impugned orders dated 5 August 2022 is declared to be illegal. (iv) The amounts be refunded to the petitioner within a period of three weeks from today along with simple interest at the rate of 9% p.a., failing which the petitioner shall be entitled for realization of further interest at the rate of 9% till its actual payment.
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