Refund of IGST paid under an ultra vires notification entry was upheld with statutory interest after appellate affirmation.

Refund of IGST paid under Entry No. 10 of Notification No. 10/2017-IGST (Rate) was held maintainable after that entry had been declared ultra vires the Integrated Goods and Services Tax Act, 2017 and the declaration had been affirmed in appeal. On that basis, the Revenue could not retain tax collected under the invalid entry, and the applicants were held entitled to refund of the amount paid, together with statutory interest.

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Issues: Whether the applicants were entitled to refund of IGST paid under Entry No. 10 of Notification No. 10/2017-IGST (Rate) dated 28.6.2017, together with statutory interest, after the entry had been declared ultra vires and that decision had been affirmed in appeal.

Analysis: The refund claim was founded on the declaration that Entry No. 10 of Notification No. 10/2017-IGST (Rate) dated 28.6.2017 was ultra vires the Integrated Goods and Services Tax Act, 2017. The earlier declaration of invalidity had been upheld by the appellate court, and therefore the tax already paid pursuant to the said entry could not be retained by the Revenue. In that background, the refund request was held to be maintainable and the applicants were also held entitled to statutory interest on the refunded amount.

Conclusion: The applicants were held entitled to refund of the IGST paid under the impugned entry, along with statutory interest.

Ratio Decidendi: Once a levy or exemption entry is declared ultra vires and that declaration attains finality in appeal, tax collected under it is refundable with statutory interest.

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