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 jurisdiction and ex facie illegal. The Court found that the petitioner's refund claim had already been adjudicated, with the Additional Commissioner (Appeals) allowing the appeal on merits by a detailed order. The Assistant Commissioner could not sit in appeal over or re-visit the concluded factual findings and legal conclusions of the appellate authority, absent any stay or challenge through proper remedies such as review or further appeal. HC directed that the petitioner be granted the refund benefits flowing from the appellate order.

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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.

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