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 petitioner's status, provide a personal hearing, and issue a reasoned order regarding IGST refund and duty drawback. The writ petition was treated as a representation, with specific directions for procedural compliance and timely resolution.

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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.

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