Refund claim classification error required fresh merits review after supplier misreported deemed export supply

A refund claim arising from EPCG-linked procurement was rejected because the supplier wrongly reported the supply under the general turnover instead of the deemed export category, which blocked processing on the common portal. The HC accepted that the error was classificatory rather than substantive and noted the petitioner's offer to file a Chartered Accountant's certificate and supporting records. It held that the claim should not be finally rejected without reconsideration on merits and directed the respondent to re-examine the matter after giving due opportunity. The rejection was set aside and the matter remitted for fresh consideration.

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Issues: Whether the rejection of the refund claim arising from EPCG-linked procurement could be sustained when the claim failed on account of a supplier's classification error, and whether the matter required fresh consideration.

Analysis: The refund claim was denied because the supplier had incorrectly shown the supply under the general turnover instead of the appropriate deemed export category, which prevented processing on the common portal. The Court accepted that the difficulty arose from this classification error and noted that the petitioner was willing to furnish a Chartered Accountant's certificate and supporting documents. In these circumstances, the Court held that the claim should not be rejected finally without reconsideration on merits, and that the respondent should re-examine the matter after affording due opportunity.

Conclusion: The refund rejection was set aside and the matter was remitted for fresh consideration, which is in favour of the petitioner.

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