IGST refund for exported goods vs duty drawback rate dispute; denial overturned, refund granted with 7% interest.

Denial of IGST refund on exported goods on the premise that the exporter had claimed higher-rate duty drawback was held unsustainable, as there was no factual foundation for such inference and the record, including the applicable notification prescribing a common drawback rate, contradicted it. Applying the principle that refund is barred only where double benefit is taken, the HC found the exporter was not availing both IGST refund and higher drawback and was therefore entitled to refund of IGST on zero-rated supplies. The HC directed refund of the IGST amount with simple interest at 7% per annum from the specified date and allowed the petition.

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Issues involved:
The petition seeks a refund of IGST paid for exports of insulated cables to a party in Myanmar. The main contention is that the refund was denied despite compliance with prescribed procedures.

Details of the Judgment:

Issue 1: Refund of IGST paid for exports

The petitioner filed a GST Return with incorrect details, which were later corrected. Despite subsequent submissions and compliances, the refund was not granted. The petitioner raised grievances, but the responses were unsatisfactory. The court noted that the export was a zero-rated supply under the IGST Act. The Respondents did not dispute this and acknowledged that the export was eligible for a refund. The court referred to relevant provisions of the CGST Act and Rules, highlighting the entitlement to a refund for zero-rated supplies.

Issue 2: Allegation of claiming higher duty drawback

The Respondents alleged that the petitioner claimed a higher duty drawback, which led to the denial of the refund. However, the court found no factual basis for this assertion. Referring to precedents, the court emphasized that if the rates of duty drawback are the same, there is no question of denying the IGST refund. The court cited judgments from the Gujarat High Court and Delhi High Court, which allowed refunds in similar cases. The court concluded that the petitioner was entitled to the IGST refund without availing double benefits.

Final Judgment:

The court directed the Respondents to refund the IGST amount paid by the petitioner for the exports, along with simple interest. The amount was specified, and the release was ordered within a specific timeframe. The petition was allowed in favor of the petitioner, with no costs imposed.

This judgment highlights the importance of correct compliance with refund procedures and the entitlement to refunds for zero-rated supplies under the relevant tax laws. The court's decision underscores the need for authorities to accurately assess claims and not deny refunds based on unfounded allegations.

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