TMI Blog2020 (3) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to the exported goods, i.e. zero rated supplies , with 7% simple interest from the date of shipping bill till the date of actual refund. The refund shall be granted after deducting the differential amount of the duty drawback for the period between July and September, 2017 - application allowed. - R/SPECIAL CIVIL APPLICATION NO. 14974 of 2019 - - - Dated:- 4-3-2020 - MR. J.B. PARDIWALA AND MR. BHARGAV D. KARIA JJ. Appearance: UCHIT N SHETH (7336) for the Petitioner(s) No. 1,2 MR NIRZAR S DESAI(2117) for the Respondent(s) No. 1,2 NOTICE SERVED BY DS(5) for the Respondent(s) No. 3 ORAL JUDGMENT (PER : MR. J.B. PARDIWALA) 1. Rule, returnable forthwith. Mr.Nirzar S. Desai, the learned standing counsel waives service of notice of rule for and on behalf of the respondents. 2. By this Writ Application under Article 226 of the Constitution of India, the writ-applicants have prayed for the following reliefs: A. This Hon ble Court may be pleased to issue a writ of mandamus or a writ in nature of mandamus or any other appropriate writ or order directing the learned Respondents to forthwith grant refund of IGST paid on exports by the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder. 3.4. The plain reading of the aforesaid provision makes it clear that the first option available to the exporter is to make the export without payment of tax against the bond or letter of undertaking in which case it could claim refund of the unutilized input tax credit. The second option is to supply goods or services on payment of the integrated tax and claim refund of such tax paid. 3.5. According to the writ-applicants, they obtained the letter of undertaking from the department for availing the option of making exports without payment of tax. The letter of undertaking dated 27.11.2017 is at Annexure-A (page No.14 of the paper-book). 3.6. It is the case of the writ-applicants that from July, 2017 onwards till the letter of undertaking was obtained, they had exported goods on payment of the IGST. According to the writ-applicants, under a misconception of law, they selected the option of export without payment of tax while filing the shipping bills though the writ-applicants, at the relevant point of time, had no letter of undertaking, and simultaneously, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red person making zero rated supplies is eligible to claim refund under the options as provided in sub-clauses (a) and (b) to clause (3) of Section 16 referred to above. 25. Section 54 of the CGST Act, 2017, provides that any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, shall make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. If, on receipt of any such application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined will have to be credited to the Fund referred to in Section 57 of the CGST Act, 2017. 26. Rule 96 of the CGST Rules provides for a deeming fiction. The shipping bill that the exporter of goods may file is deemed to be an application for refund of the integrated tax paid on the goods exported out of India. Section 54 referred to above should be read along with Rule 96 of the Rules. Rule 96(4) makes it abundantly clear that the claim for refund can be withheld only in two circumstances as provided in sub-clauses (a) and (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court observed as under : 4. Learned counsel for the Union of India submitted that the law declared by this Court is supreme law of the land under Article 141 of the Constitution of India, 1950 (in short the Constitution ). The Circulars cannot be given primacy over the decisions. 5. Learned counsel for the assessee on the other hand submitted that once the circular has been issued it is binding on the revenue authorities and even if it runs counter to the decision of this Court, the revenue authorities cannot say that they are not bound by it. The circulars issued by the Board are not binding on the assessee but are binding on revenue authorities. It was submitted that once the Board issues a circular, the revenue authorities cannot take advantage of a decision of the Supreme Court. The consequences of issuing a circular are that the authorities cannot act contrary to the circular. Once the circular is brought to the notice of the Court, the challenge by the revenue should be turned out and the revenue cannot lodge an appeal taking the ground which is contrary to the circular. 6. Circulars and instructions issued by the Board are no doubt binding in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extended the benefit under a notification and, therefore, principle of estoppel would apply, though there are authorities which opine that a circular could not have altered and restricted the notification to the determent of the assessee. Circulars issued under tax enactments can tone down the rigour of law, for an authority which wields power for its own advantage is given right to forego advantage when required and considered necessary. This power to issue circulars is for just, proper and efficient management of the work and in public interest. It is a beneficial power for proper administration of fiscal law, so that undue hardship may not be caused. Circulars are binding on the authorities administering the enactment but cannot alter the provision of the enactment, etc. to the detriment of the assessee. Needless to emphasise that a circular should not be adverse and cause prejudice to the assessee. (See : UCO Bank, Calcutta v. Commissioner of Income Tax, West Bengal (1999)4 SCC 599. 26. In Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries (2008)13 SCC 1 , it has been held that circulars and instructions issued by the Board are binding on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mit of two different interpretations. 29.In this regard, we may state that the circular dated 15.04.1994 was ambiguous and, therefore, as long as it was in operation and applicable possibly doctrine of contemporanea exposition could be taken aid of for its applicability. It is absolutely clear that the benefit and advantage was given under the circular and not under the notification dated 07.03.1994, which was lucid and couched in different terms. The circular having been withdrawn, the contention of contemporanea exposition does not commend acceptation and has to be repelled and we do so. We hold that it would certainly not apply to the notification dated 21.01.2000. 34.We take notice of two things so far as the circular is concerned. Apart from being merely in the form of instructions or guidance to the concerned department, the circular is dated 9th October 2018, whereas the export took place on 27th July 2017. Over and above the same, the circular explains the provisions of the drawback and it has nothing to do with the IGST refund. Thus, the circular will not save the situation for the respondents. We are of the view that Rule 96 of the Rules, 2017, is very clear. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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