SEZ refund claims must follow binding GST precedent, with remand required where authorised-operations eligibility remains unexamined.

A SEZ unit's refund of input tax credit could not be rejected solely because it was the recipient, as the existing High Court ruling on refund claims remained binding while the Supreme Court had kept the question of law open. The authorities were therefore required to examine the claim under the prevailing GST refund framework. However, because the factual question whether the services were used for authorised operations and endorsed by the specified officer had not been decided below, the matter was remanded for fresh adjudication on that limited issue. The impugned rejection and appellate orders were set aside.

---

---

Issues: (i) whether a Special Economic Zone unit seeking refund of input tax credit was entitled to have its claim examined in the light of the law governing refund claims under the GST regime and the binding effect of the existing High Court ruling; (ii) whether the matter required remand for verification of whether the services were for authorised operations endorsed by the specified officer.

Issue (i): whether a Special Economic Zone unit seeking refund of input tax credit was entitled to have its claim examined in the light of the law governing refund claims under the GST regime and the binding effect of the existing High Court ruling.

Analysis: The refund was rejected on the premise that only the supplier could claim refund. The appellate authority declined to follow the Gujarat High Court ruling on the ground that it had been challenged before the Supreme Court, but the later Supreme Court order kept the question of law open while dismissing the special leave petition. In that situation, the law declared by the High Court continued to operate, and the authorities were bound to consider the petitioner's claim accordingly.

Conclusion: The petitioner's refund claim could not be rejected merely on the ground that it was a recipient SEZ unit, and the authorities were bound to apply the existing legal position.

Issue (ii): whether the matter required remand for verification of whether the services were for authorised operations endorsed by the specified officer.

Analysis: A separate objection was raised that no finding had been recorded on whether the services were for authorised operations with the necessary endorsement. Since this aspect had not been examined below and the petitioner had no opportunity to meet it, fresh consideration was necessary.

Conclusion: The matter was required to be remanded for fresh adjudication on that aspect.

Final Conclusion: The impugned refund rejection and appellate orders were set aside, and the refund claims were sent back for fresh consideration in accordance with the governing law.

Ratio Decidendi: A subordinate tax authority remains bound by an existing High Court ruling unless displaced by a contrary decision, and where a factual eligibility requirement for refund has not been examined, the matter may be remanded for fresh determination.

---