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of <h1>Court orders refund of wrongly adjusted amount in Writ Petitions, stresses compliance with legal provisions.</h1> <h3>M/s. Chaizup Beverages LLP Versus Deputy Commissioner of GST & Central Excise</h3> M/s. Chaizup Beverages LLP Versus Deputy Commissioner of GST & Central Excise - 2019 (25) G. S. T. L. 26 (Mad.) , [2020] 72 G S.T.R. 89 (Mad) Issues:1. Claim for refund of drawback sanctioned under the Goods and Service Taxes Act, 2017.2. Rejection of refund claims by the Assistant Commissioner of GST & Central Excise.3. Filing of appeals challenging the rejection orders.4. Provisional refund orders issued without prior opportunity to the petitioner.5. Interpretation of Section 107(7) of the CGST Act, 2017 regarding stay of recovery proceedings.Issue 1: Claim for refund of drawback sanctioned under the Goods and Service Taxes Act, 2017The petitioner, an exporter of tea and an assessee under the Act, purchased sacks and tea remitting IGST, CGST, and SGST. Exports were done without payment of IGST under a Letter of Undertaking and for drawback. The petitioner sought a refund of the drawback sanctioned, which was paid over to them.Issue 2: Rejection of refund claims by the Assistant Commissioner of GST & Central ExciseAfter provisional sanction of refund amounts, a show cause notice was issued stating that the claims were erroneously sanctioned regarding IGST and CGST. The petitioner objected, stating that the drawback represented the Customs Duty component alone. However, the authority confirmed the proposal in the show cause notice, reversing the refunds sanctioned and ordering recovery.Issue 3: Filing of appeals challenging the rejection ordersThe petitioner filed appeals challenging the rejection orders before the Commissioner of GST & Central Excise, Coimbatore, along with a statutory pre-deposit of 10% of the disputed amount. The appeals are pending consideration.Issue 4: Provisional refund orders issued without prior opportunity to the petitionerWhile the appeals were pending, the petitioner filed refund claims for unutilized credit. The respondent passed provisional refund orders without prior opportunity to the petitioner, restricting the refunds and adjusting outstanding dues.Issue 5: Interpretation of Section 107(7) of the CGST Act, 2017 regarding stay of recovery proceedingsThe respondent erroneously claimed that there was no stay of the order of reversal of the refunds granted. However, as per Section 107(7) of the Act, where 10% of the disputed amount is pre-deposited, recovery proceedings for the balance amount shall be deemed to be stayed. The petitioner had made the pre-deposit, and thus, no recovery should be effected.In conclusion, the court allowed the Writ Petitions, directing the respondent to refund the amount wrongly adjusted within three weeks from the date of the order, highlighting the importance of complying with the legal provisions regarding stay of recovery proceedings.
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