2025 (3) TMI 1471 - HC - GST

Shipping Company Wins Right to Submit New Certification, Overturns Prior Refund Denial and Secures Fresh Hearing

P.B Enterprise Versus Union of India & Ors.

The SC reviewed a customs and GST refund dispute involving shipping bill certification. The court allowed the petitioner to present newly certified ... Refund of unutilised input credit - rejection primarily based on the ground that the six shipping bills in question were signed by the Inspector of Customs rather than by the Superintendent of Customs - HELD THAT:- The petitioner should be allowed to rely on the shipping bills that have now been certified by the relevant Superintendent of Customs. The order of the appellate authority dated February 28, 2023, is set aside to the extent that it pertains to the three shipping bills numbered 607682 dated October 1, 2020, 607685 dated October 1, 2020, and 607467 dated October 22, 2020. Application disposed off. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment include:Whether the rejection of the refund claim concerning three shipping bills, due to the lack of certification by the Superintendent of Customs, was justified.Whether the petitioner should be allowed to present newly certified shipping bills before the appellate authority.The implications of the absence of the GST Appellate Tribunal on the petitioner's ability to appeal the appellate authority's decision.Whether the initiation of recovery proceedings by the Revenue under Section 73 of the Central Goods and Services Tax Act, 2017, was appropriate given the circumstances.ISSUE-WISE DETAILED ANALYSIS1. Justification of Rejection Due to Lack of CertificationThe relevant legal framework involves the requirement for shipping bills to be certified by the Superintendent of Customs to validate the refund of unutilized input credit. The appellate authority initially rejected the claims for three shipping bills because they were signed by the Inspector of Customs rather than the Superintendent.The Court interpreted this requirement strictly, emphasizing the procedural necessity for proper certification. However, it acknowledged the new evidence presented by the petitioner, indicating that the shipping bills had since been certified by the Superintendent of Customs.The Court found that the initial rejection, while procedurally correct, did not account for the subsequent certification and thus warranted reconsideration.2. Presentation of Newly Certified Shipping BillsThe Court considered whether the petitioner should be allowed to present the newly certified shipping bills. The petitioner argued that these documents could not be presented earlier and that their inclusion could potentially alter the outcome of the refund claim.The Court reasoned that in the interest of justice, the petitioner should be allowed to rely on the newly certified shipping bills. This decision was based on the principle that procedural technicalities should not impede substantive justice, especially when new evidence could significantly impact the case's outcome.3. Absence of GST Appellate TribunalThe petitioner contended that the absence of the GST Appellate Tribunal prevented an appeal against the appellate authority's decision. The Court acknowledged this procedural gap, which left the petitioner without a conventional appellate recourse.In response, the Court provided a remedy by setting aside the appellate authority's decision concerning the disputed shipping bills and directing a rehearing, thereby temporarily circumventing the absence of the Tribunal.4. Appropriateness of Recovery ProceedingsThe Revenue had initiated recovery proceedings under Section 73 of the Central Goods and Services Tax Act, 2017. The Court considered whether this was appropriate given the ongoing dispute over the refund claims.The Court concluded that recovery proceedings should be stayed until the appeal concerning the newly certified shipping bills was resolved. This decision was based on the principle of maintaining the status quo to prevent potential injustice to the petitioner while the appeal was pending.SIGNIFICANT HOLDINGSThe Court established several significant principles in this judgment:The necessity of certification by the Superintendent of Customs for refund claims, while procedurally critical, should not preclude the reconsideration of claims if subsequent certification is obtained.The absence of an appellate tribunal should not unduly prejudice a party's ability to seek justice, and courts may provide interim remedies to address such procedural gaps.Recovery proceedings should be stayed pending the resolution of substantive disputes concerning the validity of refund claims.The final determinations on each issue were as follows:The appellate authority's order was set aside concerning the three disputed shipping bills, and a rehearing was directed.The petitioner was allowed to present the newly certified shipping bills.Recovery proceedings were stayed until the appeal was disposed of.The Court directed the appellate authority to dispose of the appeal within three months, ensuring that the petitioner is granted an opportunity to be heard. This decision underscores the Court's commitment to procedural fairness and substantive justice.