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TMI Blog2025 (3) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... eti waives service of notice of rule for the Respondent Nos. 4 and 5. With the consent of learned advocates for the respective parties, the matter is taken up for hearing, as the issue involved is very short. 3. The petition has been filed under Article 226 of the Constitution of India with the following prayers:- "a. A writ of mandamus, or any other appropriate writ, order and/or directions in the nature of mandamus to strike down and declare Circular No. 125/44/2019-GST dated 18.11.2019 to the extent it denies the refund of unutilized ITC on account of supplies made to SEZ units without payment of tax as arbitrary, discriminatory and contrary to provisions of CGST Act (Annexure-A); b. A writ of mandamus, or any other appropriate wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the category "Supply to SEZ Unit without payment of Taxes" can only be claimed only once, as per the Board Circular No. 125/44/2019 - GST dated 18.11.2019. 4.4 A Show Cause Notice was issued on 01.11.2022, notifying the Petitioner to explain why their refund application should not be rejected for violating paragraph No. 8 of Circular No. 125/44/2019 dated 18.11.2019. 4.5 In response, the Petitioner submitted a detailed reply on 07.11.2022, primarily arguing that due to an inadvertent error, 5 bills for supplies to the SEZ Unit were missed while calculating the ITC of IGST claimed in the previous Refund Application. However, Respondent No. 4 issued an order on 29.11.2022 rejecting the refund on the grounds that it was not permissible under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.1 On perusal of the affidavit-in-reply on behalf of the respondent No. 4 and 5 we find that the respondents have not contended that the petitioner is not entitled to the quantum of refund claimed in the second refund application. The respondents have specifically contended as under:- "6. In view of the above factual position, this officer was not in a position to sanction again the refund claim of Rs. 12,62,088/- filed by the petitioner for the tax period May-2022 in the category of "Any other (Specify)". As there is no specific provision/formula framed by the Central Board of Indirect Taxes, New Delhi for sanction such type of refund i.e. again for the same period. Therefore, the guidelines adopted by the refund sanctioning authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gee Fabrics Private Limited Vs. Union of India reported in 2023 SCC OnLine Guj.3044, this Court has held as under:- "32. It is also pertinent to note that the respondent authorities cannot dispute claim of the petitioner's eligibility the of refund of Rs. 22,78,798/- for the month of August 2018 calculated as per Notification No. 20/2018 read with Rule 89 of the CGST Rules, 2017. It is also not in dispute that the said claim of the petitioners was restricted to Rs. 14,71,946/- by GST Portal in view of reversal of wrongly claimed credit of Rs. 10,12,188/-on capital goods by petitioner company. authorities consideration ought that eligible for balance the Therefore, respondent to the have taken petitioners amount into were of refund of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of refund claim." 9. In view of the above position, this Court is of the view that once the respondents admit the entitlement of the petitioner to the quantum of refund, then this Court has ample powers and the jurisdiction to direct the respondents to grant the petitioner, the said refund. In the opinion of this Court, the failure so to do would tantamount to a stamp of approval by this Court to the unjust enrichment on the part of the Department to the excess tax collected by it from the petitioner, which it did not have authority to collect under Article 265 of the Constitution of India. Circulars of the Board are undoubtedly important to follow for both the Assessee and the Department. 10. Today, the operation of Tax Laws in Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction under Articles 226 and 227 of the Constitution of India to hold that the procedure, being a hand-maiden of substantive justice, does not edge out the substantive rights of the petitioner. Otherwise, it would tantamount to throwing the baby out with the bath-water. 12. In such view of the matter, the present petition succeeds and impugned order dated 29.11.2022 issued by the respondent no. 4 and order dated 04.05.2023 issued by the respondent No. 5 rejecting the petitioner's appeal are hereby quashed and set aside. The respondents are directed to process the refund application dated 19.10.2022 afresh in the light of this judgment. The said exercise may be carried out within a period of Twelve (12) weeks from the date of receipt of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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