Statutory rules prevail over conflicting circulars in refund claims; rejection set aside and matter remanded for fresh decision.

An administrative circular cannot prevail over Rule 96 of the Central Goods and Services Tax Rules, 2017. The Madras HC held that rejection of a duty drawback or IGST refund claim based on Circular No. 37/2018-Customs could not stand where the dispute had to be decided under the statutory rule. The rejection order was set aside, and the matter was remanded for fresh adjudication in accordance with law after giving the claimant a reasonable opportunity of hearing.

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Issues: Whether the rejection of duty drawback or IGST refund claim based on Circular No. 37/2018-Customs could stand when the circular was stated to be inconsistent with Rule 96 of the Central Goods and Services Tax Rules, 2017.

Analysis: The impugned rejection rested on the circular, though the controversy was governed by Rule 96 of the Central Goods and Services Tax Rules, 2017. The Court followed the view that an administrative circular cannot prevail over the statutory rule and that the petitioner's claim had to be reconsidered in the light of the binding legal position. Fresh adjudication was directed after affording a reasonable opportunity of hearing.

Conclusion: The rejection order was set aside and the matter was remanded to the respondents for fresh decision in accordance with law.

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