Court Orders Review of IGST Refund Claim, Grants Applicant Right to Seek Refund

The court directed respondent No.1 to review the IGST refund claim based on shipping bills, following precedents from M/s. Amit Cotton Industries and Awadkrupa Plastomech cases. The court ordered a decision within six weeks and granted the applicant the right to seek the refund as requested. Interest at 9% was awarded for delayed refunds. All related applications were disposed of accordingly.

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Issues Involved:
1. Eligibility for IGST refund claim on the basis of shipping bills.
2. Decline of IGST refund due to availing drawback at a specified rate.
3. Applicability of precedent decisions in similar cases.
4. Entitlement to interest on delayed refund.

Detailed Analysis:

1. Eligibility for IGST Refund Claim on the Basis of Shipping Bills:
The writ applicant is engaged in the manufacture of lead sulphate and claims eligibility for an IGST refund based on shipping bills for exported goods. According to the applicant, the shipping bills filed by an exporter are deemed to be an application for refund of the integrated tax paid on the goods exported out of India, as per Rule 96A of the CGST Rules, 2017. The applicant argues that the refund should be sanctioned as the shipping bills meet the necessary criteria.

2. Decline of IGST Refund Due to Availing Drawback at a Specified Rate:
The grievance of the writ applicant is that the respondent No.2 declined the refund of the IGST amount paid on the shipping bills because the applicant had availed drawback at the rate of 1.10%. The applicant contends that it claimed a lower rate of drawback in accordance with Notification No.131/2016 dated 31st October 2016 and that the declaration of a higher drawback rate was an inadvertent error. The respondents invoked Circular No.37/2018-Customs dated 09/10/2018 to deny the refund, arguing that the applicant’s claim of higher duty drawback precludes the IGST refund.

3. Applicability of Precedent Decisions in Similar Cases:
The principal argument of the applicant’s counsel is that the controversy is covered by the Division Bench decision in M/s. Amit Cotton Industries vs. Principal Commissioner of Customs, which ruled that the shipping bill filed by an exporter is deemed to be an application for refund of the integrated tax paid on the goods exported out of India. The court noted that the decision in Amit Cotton Industries has not been challenged before the Supreme Court and thus remains binding. Additionally, the court referred to a similar order in the case of Awadkrupa Plastomech Pvt. Ltd. vs. Union of India, which supported the applicant’s position.

4. Entitlement to Interest on Delayed Refund:
The applicant also sought interest at the rate of 9% on the refund amount from the date of the shipping bill until the actual payment date, arguing that the refund was arbitrarily and illegally withheld. The court ruled that if the refund is not sanctioned and paid within six weeks from the receipt of the order, interest at the rate of 9% would start accumulating and must be paid accordingly.

Conclusion:
The court directed the respondent No.1 to immediately look into the matter and pass an appropriate order in accordance with the law regarding the IGST refund claim, considering the precedents set by the decisions in M/s. Amit Cotton Industries and Awadkrupa Plastomech. The exercise must be completed within six weeks from the receipt of the order. The court allowed the writ applicant to approach the respondent No.1 with the order and request for the refund as prayed for in the writ applications. All writ applications and connected civil applications were disposed of accordingly.

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