TMI Blog2023 (2) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... e of such powers were satisfied and therefore, the Court held that the authority had lacked the jurisdiction. Before withholding the order, according to the Court, the Commissioner is empowered to withhold the same if he is of the opinion that such refund is likely to adversely affect the revenue. The Commissioner is required to form an opinion that grant of refund is likely to adversely affect and the fact regarding formation of such opinion needs to be reflected in the order passed under Section 39 withholding the refund. There was not a whisper as regards any opinion as envisaged and hence, the Court held that withholding of the refund was not in accordance with law. The Custom Authority having permitted the goods to be exported and the petitioner having paid the IGST on the export, the process of the refund on such IGST after clearance of the goods for export is what is being provided as Rule 96 is very clear that shipping bill of the export needs to be treated as the refund application. Grant of protection (earlier) There was no ambiguity in relation to the consignment except the wrong declaration of the address in the export documents i.e. Export Invoice Shipping B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort. M/s.Anjali Enterprises raises invoices on the petitioner for sale of mobile phones and the petitioner thereafter, files the shipping bills and export the goods after due clearance by the customs authorities. 1.2 The IGST is always paid on the goods under the Integrated Goods and Services Tax Act, 2017. Exports being zero rated supplies under Section 16 of the IGST Act, the shipping bills filed by the petitioner are treated as refund applications under Rule 96 of the Central Goods and Services Tax Rules, 2017 ( the CGST Rules hereinafter). 1.3 The refund is, therefore, processed by the Customs Authorities in accordance with Rule 96 of the CGST Rules. The petitioner points out with emphasis that the proper officer for determining and adjudicating refund of IGST paid on export is the Customs Authority.It receives consideration for export in foreign exchange. 1.4 On 31.07.2020, as per the case of the petitioner, the search proceedings were conducted by the respondent authorities under the CGST Act at the premise of the petitioner. The petitioner explained the modus operantdi of its business in detail and the employees of the petitioner cooperated with the respondent. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases. The petitioner showed its inability as the e-way bills right upto the airport were already seized by the respondent at the time of search proceedings. The respondent also required the export documents for adjudication and scrutiny of refund granted to the petitioner. 1.12 On 13.08.2020, the petitioner addressed a communication to the respondent through e-mail informing the authorities that the official press release of 23.04.2018 issued by the Central Board of Indirect Taxes and Customs ( the CBIT hereinafter) clarified that only one e-way bill was required for transactions on bill to ship to basis. This circular was binding on the respondent and it was pointed out that refund of IGST paid on export was granted by the Custom Authorities. Therefore, the respondent did not have the jurisdiction to re-adjudicate or scrutinize such refund. 1.13 The respondents since were not willing to drop the proceedings and insisted on initiating the inquiry and production of documents in the summons issued on 07.08.2020 and also further threatened to take coercive actions including the arrest and further detention though there is no prima facie adjudication of any liability agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of e-way bill much after the movement the goods is over and that to in respect of transactions which were admittedly accounted by the petitioner is according to the petitioner without jurisdiction and contrary to the object and purpose of e-way bill provisions. 2. Resultantly, the prayers sought for in the present petition are as follow: 34 A. This Hon ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ, order or direction quashing and setting aside summons dated 7.8.2020(annexed at Annexure A) requiring presence of the Petitioner as well as production of documents as mentioned therein; B.It may please be held that the Respondents have no jurisdiction to initiate adjudication/scrutiny of refund of IGST paid on exports which was processed by the Customs authorities; C. Without prejudice to the above and in the alternative it may please be held that the Respondents have no jurisdiction to call for production of second e-way bill in respect of bill to ship to transactions which is contrary to official press release of CBIC dated 23.4.2018; D. Without prejudice to the above and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppearing for the respondents. It appears that the respondent No.2 has now gone to the extent of informing the Customs Authority that the refund of the IGST paid on the export should not be processed. We once again questioned the respondent No.2 under which authority, he could have asked the customs people to do so. 3. Learned Standing Counsel appearing for the respondents would submit that, there is some doubt as regards the Eway bill. The respondent No.2 would like to interrogate the writ applicant in this regard. 4. Prima facie, Mr. Uchit Sheth, the learned counsel appearing for the writ applicant is right in his submission that once the Eway bill is generated, the export cannot be disputed. If there is any doubt as regards the export of the goods, it is for the customs authority to take up the issue. Why should the respondent No.2 meddle into the affairs and jurisdiction of the Customs Authority. It has also been brought to our notice that the goods to be exported were detained by the Customs Authority at the instance of the respondent No.2, but later, such goods were permitted to be cleared and those were actually exported. 5. We would like to hear the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gar the respondent No.3 had issued the detention memo dated 31.07.2020. 3.4 The letter dated 04.08.2020 from the office of the Commissioner of Central Goods and Service Tax, Bhavnagar issued the Joint Commissioner (AE) was informed to the petitioner calling for the details as the export documents had declared wrong address which did match the address of their CGST Registration had reflected and that was apprised to the respondent No.3 for verifying the following three details: (i) Whether the declaration of address in Export documents and shipping bills are correct or otherwise? (ii) Whether mobile phones already exported by the exporter were opened and processed and exported second hand mobile phones in the guise of new mobile phone as declared in the respective shipping bills and availed export benefits i.e. drawback/MEIS/refund of IGST on the declared export price of new mobile? (iii) Whether the petitioner has availed refund fraudulently or otherwise? 3.5 In furtherance to the letter dated 04.08.2020, the petitioner s goods had been released from detention on 07.08.2020 and were allowed to be exported vide release order (LEO) dated 07.08.2020. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplex, Hospital Road, Porbandar. The petitioner had not received the goods and he had in fact availed and utilized the Input Tax Credit for paying the IGST against their export. 4.4 During the search proceedings, no responsible persons were available at Porbandar based firm and therefore, the respondent had issued the summons dated 02.08.2020 to the petitioner for being present on 03.08.2020 and to produce all document corroborating the evidences. 4.5 The request was made on the part of the petitioner for 15 days vide its communication dated 03.08.2020, which was accepted by the respondent as the part of the principal of natural justice and a fresh summons on 07.08.2020 was issued. 4.6 The further investigation could not be proceeded by the respondent in absence of any inquiry of the petitioner under Section 70 of the CGST Act, 2017. The respondent, therefore, initiate the inquiry to establish the chain of movement of goods exported and Input Tax Credit availed and utilized by the petitioner as from the documentary evidences, it was realized that the petitioner had not received the physical Mobile Phones at the declared premise premise. 4.7 M/s.Anjali Enterprise is a si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions laid under Notification No.02 of 2020-Central Tax dated 01.01.2020 nor generated valid e-way bills. The petitioner has availed the Input Tax Credit on all such purchases and also utilized the same in paying the applicable IGST. 4.10 Rule 138A of the CGST Rules prescribes that the person in charge of the conveyance shall carry the invoice or bill of supply or delivery challans and in case of transportation of goods by road, he shall also carry a copy of the e-way bill physical form or the e-way bill number in electronic mode. Rule 138 E-way Rules of Central Goods and Service Tax Rules, 2017 have been notified by the Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes and Customs vide Notification No.12/2018- Central Tax dated 07.03.2018. The said Notification has come into force on 01.04.2018 as notified by the Notification No.15/2018-Central Tax dated 23.03.2018. The petitioner has procured the Mobile Phones from M/s.Anjali Enterprise under the incorrect Tax Invoices as per the Notification No.02/2020-Central Tax dated 01.01.2020. E-way bills are the documents which are to be enclosed with all the tax invoices having value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of export. The transactions are on bill to ship to basis, thus there is no question of non-receipt of goods or generating false eway bills with an intention to evade the payment of tax. 5.2 The allegation of the respondent that the petitioner did not maintain the books of accounts is also contrary to the facts, according to the petitioner. The respondents themselves have seized the accounting records of the petitioner at the time of the search. 5.3 The petitioner also has expressed the surprises as to how the petitioner would export the goods without the receipt of the goods. The petitioner never denied the cooperation to the authority. The petitioner objected to the very jurisdiction of the authorities to verify the export transactions and the refund of the IGST granted by the Custom Authorities. Since the respondent did not accede to such a request, this petition has been preferred. 5.4 It is already given in explanation regarding the old address at Sheetal Complex and alleged discrepancy in invoice is concerned, the same being merely technical. The presumptions sought to be drawn by the respondent No.2 authority that the goods are supplied in Porbandar and not exporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 143(1) of the and the Assessing Officer forms an opinion that grant of refund may adversely affect the recovery of revenue. He may subject to fulfilling the conditions contained in the provisions withhold the refund till the date of scrutiny assessment. It was held by the Bombay High Court that the powers vested with the Assessing Officer are not unguided or unlimited. The exercise of powers under Section 241A are subject to the Assessing Officer forming a bona fide opinion that grant of refund may adversly affect the recovery of the revenue. Further, he has to record these reasons in writing and can withhold the refund only with previous approval of the Principal Commissioner or Commissioner as the case may be. These are, thus, the safeguards against the arbitrary and unguided exercise of powers. 7. In this background, the request on the part of the petitioner is to direct the authority to release the refund. Yet another decision of this Court is of Ganesh Sales Corporation vs. State of Gujarat, reported in (2016) 68 taxmann.com (Gujarat). This was the case where the refund had been withheld for the period from 01.07.2014 to 30.09.2014 under Section 39 read with Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 07.08.2020 and the goods were released from detention. The fresh summons thereafter was received by him on 8.8.2020. On account of the seizure of e-way bills at the time of search proceedings, he had shown his inability to produce those bills. We could notice that heavy reliance is placed on the Central Board of Indirect Taxes and Customs. A press release of 23.4.2018 in relation to the one e-way bill were required for transaction to ship to basis insisting that this is binding to the respondent. 9. The Custom Authority having permitted the goods to be exported and the petitioner having paid the IGST on the export, the process of the refund on such IGST after clearance of the goods for export is what is being provided as Rule 96 is very clear that shipping bill of the export needs to be treated as the refund application. 10. We could notice that the respondents questioning is opposing of e-way bills in support of purchase from Ms/. Anjali Enterprise which according to the petitioner is a sister concern and the CBIC circular is favoring it. We have also noticed that no show cause notice till date is issued. The summons had been issued and thereafter the petitioner approache ..... 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