2022 (9) TMI 1333 - HC - GST

Exporter Wins Challenge Against Arbitrary Classification, Secures Fair Reassessment and Hearing Rights for IGST Refund Claims

HC ruled that a 'risky exporter' classification must follow due process. The court mandated the Commissioner to conduct a fair reassessment of the ... Risky exporter - refund of Integrated Goods and Services Tax (IGST) - duty drawback - Standard Operating Procedure - treat as representation - personal hearing - speaking order - writ of mandamusRisky exporter - refund of Integrated Goods and Services Tax (IGST) - Standard Operating Procedure - treat as representation - Whether the petitioner's grievance regarding classification as a 'risky exporter' and consequent denial of IGST refund and duty drawback should be re-examined by the jurisdictional authority by treating the writ petition as a representation. - HELD THAT: - The Court directed that respondent no.3/Commissioner shall treat the writ petition as a representation and examine the stand taken by the petitioner in its rejoinder. The matter of classification as a 'risky exporter' and the denial of refund/duty drawback is not finally adjudicated on merits by this Court; instead the Commissioner is required to re-consider the matter afresh in light of the petitioner's rejoinder and the applicable Standard Operating Procedure. The Court thereby remitted the substantive controversy for fresh administrative consideration rather than deciding entitlement to refund itself. [Paras 8]Respondent no.3/Commissioner to treat the writ petition as a representation and re-examine the petitioner's classification and refund claims afresh.Personal hearing - speaking order - Whether the petitioner is to be afforded a personal hearing and whether the authority must pass a speaking order recording reasons of its decision. - HELD THAT: - The Court directed that an opportunity of personal hearing be afforded to the authorised representative of the petitioner and specified the date and time for appearance. Thereafter the Commissioner is required to pass a reasoned (speaking) order and furnish a copy to the petitioner. The directions impose procedural safeguards on the re-examination mandated by the Court, ensuring the petitioner's representations are heard and the decision is recorded with reasons. [Paras 8]The authorised representative shall be given a personal hearing and the Commissioner shall pass and furnish a speaking order following that hearing.Final Conclusion: The writ petition is disposed of by remitting the matter to respondent no.3/Commissioner to treat the petition as a representation, afford a personal hearing to the authorised representative on the specified date, and thereafter pass a speaking order within the timeline directed by the Court; liberty to challenge the fresh order is preserved. Issues:Refund of Integrated Goods and Services Tax (IGST) and duty drawback denied to petitioner categorized as a 'risky exporter.'Analysis:The writ petition highlighted the petitioner's grievance regarding the denial of a refund of IGST and duty drawback due to being classified as a 'risky exporter.' The petitioner, a proprietorship concern, argued that it complied with the Standard Operating Procedure (SOP) outlined in the Central Board of Excise and Customs' Circular No.131/1/2020-GST. The petitioner contended that despite being subjected to an examination confirming compliance, the refund was withheld. The respondents, represented by Mr. Aditya Singla, raised concerns about incomplete inquiries, pointing to specific documents in the case file. Mr. Mittal, representing the petitioner, disputed these claims, leading to a request for further clarification on the missing documents.On subsequent hearings, the respondents sought time to present a counter-affidavit and acknowledged the presence of both the counter-affidavit and the petitioner's rejoinder on record. Mr. Singla emphasized that addressing three queries in the counter-affidavit could potentially resolve the petitioner's grievances if the petitioner appeared before the concerned officer. The substantive prayers in the writ petition included seeking a mandamus to issue a No Objection Certificate as per the SOP and direct the authorities to grant the IGST refund to the petitioner.The petitioner expressed satisfaction with treating the writ petition as a representation and requested a reassessment to determine if it indeed qualified as a 'risky exporter.' The jurisdictional authority, respondent no. 3/Commissioner, was tasked with examining the petitioner's stand as per the rejoinder and providing an opportunity for a personal hearing. The Commissioner was directed to issue a speaking order after the hearing, allowing the petitioner to challenge it if necessary. The matter was disposed of with specific directions for the Commissioner to act promptly and complete the process by a specified date, with a compliance listing scheduled accordingly.