2023 (8) TMI 581 - HC - GST

Refund of export ITC restored as authority lacked jurisdiction to override final appellate order granting benefits

HC quashed the impugned order of the Assistant Commissioner rejecting refund of ITC on inputs and input services used for export, holding it to be without ... Orders of appellate authority binding on subordinate authorities - judicial discipline - lack of jurisdiction - review under Section 112(3) of the CGST Act, 2017 - interest under Section 56 of the CGST Act, 2017 - refund of input tax credit for export of services - Bank Realisation Certificate (FIRC) correlationOrders of appellate authority binding on subordinate authorities - lack of jurisdiction - Bank Realisation Certificate (FIRC) correlation - Whether the Assistant Commissioner could revisit and reject the refund claim after the Additional Commissioner (Appeals) had allowed the petitioner's appeal on the basis of findings of correlation between invoices and FIRCs. - HELD THAT: - The Court found that the Additional Commissioner (Appeals) had conducted a fact-finding exercise, expressly recording correlation between invoice details and FIRCs and allowing the appeal. Once such findings and order were concluded and not stayed or successfully challenged, a subordinate authority like the Assistant Commissioner was not empowered to re-open those findings and effectively sit in appeal over the Appellate Authority's order. The appropriate course for the department, if dissatisfied, was to seek review or challenge the order in the prescribed higher forum under the review/appeal mechanism (as referred to in paragraph 11 of the respondents' affidavit and Section 112(3) of the CGST Act, 2017), not to have the subordinate officer re-adjudicate the same issues. Reliance on the principle of judicial discipline and the binding effect of appellate orders (as reflected in Kamlakshi and followed in Globus Petroadditions) supports that the impugned order proceeded in patent lack of jurisdiction and was therefore illegal. Having held the impugned rejection to be without jurisdiction, the Court directed sanction of the claimed refund with appropriate interest under Section 56 of the CGST Act, 2017 and specified a time frame for payment. [Paras 10, 13, 14]The impugned order passed by the Assistant Commissioner was quashed as being in patent lack of jurisdiction for revisiting findings recorded by the Additional Commissioner (Appeals); the respondents were directed to sanction the refund with appropriate interest and to pay the amount within two weeks.Final Conclusion: Writ petition allowed; impugned order set aside for lack of jurisdiction. Respondents directed to sanction and refund the claimed amount with interest under Section 56 of the CGST Act, 2017 within two weeks; no costs. Issues Involved:1. Validity and legality of the impugned order dated 27.01.2023.2. Entitlement of the petitioner to a refund of Rs. 11,69,07,326 with interest.3. Jurisdiction of the Assistant Commissioner to revisit the findings of the Appellate Authority.Summary:1. Validity and legality of the impugned order dated 27.01.2023:The petitioner challenged the impugned order dated 27.01.2023 passed by the Assistant Commissioner, which rejected the petitioner's refund claim. The petitioner argued that the Assistant Commissioner erred by revisiting the findings of the Additional Commissioner (Appeals) dated 11 October 2022, which had allowed the refund claim. The Court observed that the Assistant Commissioner had no authority to sit in appeal over the orders passed by the Additional Commissioner (Appeals) and that the impugned order was passed in patent lack of jurisdiction and was illegal.2. Entitlement of the petitioner to a refund of Rs. 11,69,07,326 with interest:The petitioner sought a refund of Rs. 11,69,07,326 along with appropriate interest. The Court noted that the petitioner had been pursuing the refund application since December 2021 and that the Additional Commissioner (Appeals) had allowed the refund claim after considering all relevant contentions and evidence. The Court directed the respondents to sanction the refund amount with appropriate interest in terms of Section 56 of the CGST Act, 2017.3. Jurisdiction of the Assistant Commissioner to revisit the findings of the Appellate Authority:The Court held that the Assistant Commissioner had no jurisdiction to revisit the concluded findings of fact and conclusions derived by the Additional Commissioner (Appeals). The Court emphasized that the only remedy for the department was to seek a review of the order passed by the Additional Commissioner (Appeals) in appropriate proceedings. The Court relied on the principles of judicial discipline laid down by the Supreme Court in Union of India Vs. Kamlakshi Finance Corporation Ltd., which mandates that revenue officers are bound by the decisions of higher appellate authorities.Conclusion:The petition was allowed, and the impugned order dated 27.01.2023 was quashed. The respondents were directed to sanction the refund amount of Rs. 11,69,07,326 with appropriate interest within two weeks. The petition was disposed of with no costs.