Exporters Win Major Tax Relief: Full IGST Refund on Ocean Freight Confirmed with Mandatory 8-Week Processing Period

HC ruled in favor of petitioner, directing refund of IGST paid on ocean freight. Based on SC's previous unconstitutional levy declaration, the authority must process the refund within 8 weeks, including statutory interest. The court found the tax levy invalid and confirmed no unjust enrichment occurred.

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Issues Involved:
1. Refund of GST amount paid under protest on ocean freight due to unconstitutional levy.

Summary:
The petitioner, engaged in the business of manufacturing and sale of textile machinery, filed a petition seeking a refund of GST amount paid on ocean freight under protest, along with interest and penalty. The petitioner contended that the levy of IGST on ocean freight was declared unconstitutional by the Supreme Court in a previous case. The respondent authority rejected the refund claim, stating that it could only be granted through a suit or writ petition, not under Section 54 of the GST Act.

The High Court held that once the Supreme Court declares a notification unconstitutional, it becomes the law of the land and must be followed by the authorities. The respondent authority was bound by the Supreme Court's decision and could not reject the refund claim based on the grounds that it fell outside the scope of Section 54 of the CGST Act. The petitioner had not passed on the tax burden, as confirmed by a certificate from a Chartered Accountant, thus unjust enrichment did not apply. The Court also referenced previous decisions supporting the petitioner's claim for refund.

Accordingly, the High Court directed the respondent authority to verify and grant the refund of the IGST paid on ocean freight by the petitioner within eight weeks, along with statutory interest. The petition was allowed in favor of the petitioner.

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