TaxTMI 
TaxTMI 
2026 (5) TMI 1652
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....x payer under the said Act. 3. The petitioner claims to be primarily engaged in the business of manufacturing and exporting of various chemical products predominantly used in the rubber industry. In order to carry out the manufacturing process, the petitioner procures a wide range of inputs, including but not limited to Resorcinol, Stearic Acid, Formaldehyde, Phenol (PTBP), Hexamine, Palm Oil Fatty Acids, Zinc Oxide, Styrene, etc. The above inputs are procured both through domestic purchases as also by way of import from international suppliers, depending upon the availability and cost efficiency. 4. According to the petitioner, among the various inputs, Resorcinol is a critical input utilized in the manufacturing process. The procurement whereof is made through import under Advance Authorisation Scheme, which allows duty free import of inputs that are used in the manufacturing of export goods. According to the petitioner, Resorcinol is procured from two major sources, namely, Japan and China. It is while importing from China that the petitioner uses the Advance Authorisation license. According to the petitioner, the inputs procured both domestically and through imports from ....
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....laim refund of such tax paid., which has since been deleted with effect from 1st October 2023. 7. To claim the refund/rebate under Section 16 of the IGST Act, provisions of Section 54 of the said Act, were made applicable and the procedure prescribed in the CGST Rules, 2017 (hereinafter referred to as the "said Rules") which are applicable for refund under Section 54 of the said Act are therefore, prescribed for availing refund under Section 16 of the IGST Act. 8. Now, Explanation 1 to Section 54 of the said Act provides that "refund" includes refund of tax paid on zero rated supply of goods or services or both or on inputs or input services used in making such zero rated supplies or refund of tax paid on the supply of goods regarded as deemed exports, or refund of unutilized input tax credit as provided under Section 54(3) of the said Act. 9. Section 54(3) provides that subject to the provisions of sub-section (10) a registered person can claim refund of unutilized input tax credit however, the proviso to the said sub-section provides that no refund of unutilized input tax credit shall be allowed in cases other than (i) zero rated supplies made without payment of tax or (....
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....ot have- (a) received supplies on which the benefit of the Government of India, Ministry of Finance Notification No. 48/2017-Central Tax, dated the October 18, 2017, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number G.S. R 1305(E), dated the October 18, 2017 except so far it relates to receipt of capital goods by such person against Export Promotion Capital Goods Scheme or Notification No. 40/2017-Central Tax (Rate), dated the October 23, 2017, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number G.S. R 1320(E), dated the October 23, 2017 or Notification No. 41/2017-Integrated Tax (Rate), dated the October 23, 2017, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number G.S. R 1321(E), dated the October 23, 2017 has been availed; or (b) availed the benefit under Notification No. 78/2017-Customs, dated the October 13, 2017, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number G.S. R 1272(E), dated the October 13, 2017 or Notification No. 79/2017-Customs, dated the October 13, 2017, p....
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.... (1) These rules may be called the Central Goods and Services Tax (Twelfth Amendment) Rules, 2018. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), in rule 89, for sub-rule (4B), the following sub-rule shall be substituted, namely:- "(4B) Where the person claiming refund of unutilised input tax credit on account of zero rated supplies without payment of tax has - (a) received supplies on which the supplier has availed the benefit of the Government of India, Ministry of Finance, notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1320 (E), dated the 23rd October, 2017 or notification No. 41/2017-Integrated Tax (Rate), dated the 23rd October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1321(E), dated the 23rd October, 2017; or (b) availed the benefit of notification No. 78/2017-C....
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....Capital Goods Scheme.". [F. No. 349/58/2017-GST (Pt.)] (Dr. Sreeparvathy S.L.) Under Secretary to the Government of India Note :- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 3/2017-Central Tax, dated the 19th June,2017, published vide number G.S.R 610 (E), dated the 19th June, 2017 and last amended vide notification No. 53/2018 - Central Tax, dated the 9th October, 2018, published vide number G.S.R 1007 (E), dated the 9th October, 2018. 14. Again by Notification No. 16/2020 dated 23rd March, 2020 an explanation was inserted in Rule 96(10) with effect from 23rd October, 2017, which provided that where IGST and Compensation Cess has been paid on procurement of inputs under Notification No. 78/2017-Customs dated 13th October, 2017 or Notification No.79/2017-Customs dated 13th October, 2017 and exemption has been availed in respect of basic Customs duty (BCD) only, such procurements would not be considered to have been procured by availing the benefit of the said notifications. The said notification was issued as per the recommendations of the GST council in....
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....an invoice referred to in rule 46 is required to be issued under clause (f) of sub-section (3) of section 31 by a registered person, who is liable to pay tax under sub-section (3) or sub-section (4) of section 9, he shall issue the said invoice within a period of thirty days from the date of receipt of the said supply of goods or services, or both, as the case may be.". 5. In the said rules,, in rule 66, in sub-rule (1), after the word, letters and figure "FORM GSTR-7", the words ", on or before the tenth day of the month succeeding the calendar month," shall be inserted with effect from the 1 st day of November, 2024. 6. In the said rules, in rule 86, in sub-rule (4B), in clause (b), the words, brackets and figures "in contravention of sub-rule (10) of rule 96," shall be omitted. 7. In the said rules, in rule 88B, in sub-rule (1), after the word and figures "or section 74", the words, figures and letter "or section 74A" shall be inserted with effect from the 1st day of November, 2024. 8. In the said rules, in rule 88D, in sub-rule (3), after the words and figures "or section 74", the words, figures and letter "or section 74A"....
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....rt regulations. 18. The petitioner further contends that by several letters dated 9th July, 2021, 9th December, 2022, 4th December, 2022 and 31st March, 2022 the department alleged that the petitioner had availed double benefit by way of encashment of accumulated ITC and accordingly, the petitioner had been directed to submit certain documents to the department which included Advance Authorisation Licenses as referred by DRI along with copy of the shipping bills, export invoices, GST Returns for the related financial period. The petitioner claims that petitioner duly responded to the same. 19. According to the petitioner, notwithstanding the above response, two several summons were issued by the DGGI under Section 70 of the CGST Act, 2017 directing the petitioner to appear before the Senior Intelligence Officer. Following the above and despite submission of requisite documents, the respondent no. 2 initially issued a notice in Form GST DRC-01A advising the petitioner to repay an amount of Rs. 6,28,27,407. Before the petitioner could formally respond to the same, and despite the petitioner seeking an extension, the show-cause notice for the period 2017-18 to 2021-22 dated 27th....
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....id Rules being omitted. 22. The respondents are represented, it has been the respondents' case that the proceedings had been initiated against the petitioner for recovery of a sum of Rs. Rs. 6,28,27,407/- which amount the petitioner had wrongfully taken refund of, by availing the benefit of automatic refund of GST. Such refund according to the respondents was obtained in contravention of the provisions of Rule 96(10) of the said Rules. The refund was availed during the subsistence of the Rules and the show-cause was also issued during the subsistence of the rules. Though the Rule has been omitted by the notification dated 8th October, 2024, the omission of Rule 89(4B) and Rule 96(10) has not been made retrospective. Consequentially, there is no irregularity in passing the order. 23. Heard the learned advocates for the respective parties and considered the materials on record. From the sequence of events narrated hereinabove, it is apparent and clear that the petitioner is a registered tax payer and is otherwise bound by the provisions of the said Act. It is also not in dispute that the petitioner between October 2017 and March 2022 had availed a refund of IGST amounting to Rs....
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.... specified notifications under which they supply goods without payment of tax or at reduced rate of tax, from exporting goods under payment of integrated tax. This is to ensure that the exporter does not utilise the input tax credit availed on other domestic supplies received for making the payment of integrated tax on export of goods. • The fundamental principle governing the provisions of refund is that in the case of exports, taxes are not exported and accordingly, the tax suffered on the inputs used in the exported goods is refunded to the taxpayer. However, where tax has not been paid on the inputs used in the exported goods, refund of IGST would tantamount to encashment of ITC, which is against the fundamental principle of taxation and also beyond the scope of Section 16(3)(b) of the IGST Act, 2017. Accordingly, provisions of Rule 96(10) of CGST Rules were formulated to avoid encashment of ITC on inputs and input services for manufacture of goods for domestic supplies, against the exports manufactured using inputs for which benefit of specified exemption notifications have been obtained. Thus, the legislative intent was to give refund of IGST only where tax paid ....
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.... noticee should be well aware and updated about various provisions of Goods & Service Tax law. Therefore, such action of the taxpayer, to enjoy undue benefit by availing exemption of IGST on imported goods in one hand and on another hand they en-cashed the accumulated ITC accrued on account of other goods and services procured indigenously by paying IGST suo motto for the purpose of export, though export being zero rated supply, was intentional and deliberate attempt to transform into cash amount from the unutilized Input Tax Credit of IGST so procured by other means and not at the time of import of their input materials contravening the provisions of Sub Rule 96(10) in terms of Notification 54/2018 read with Sec 74 of CGST Act'2017 and relevant provisions of IGST Acts and Rules, 2017. The taxpayer is therefore required to pay back refunded amount along with interest U/Sec 50 of CGST Act and owing to such violation of provisions, penalty is also required to be imposed under section 122(2)(b) of CGST Act' 2017 read with relevant provisions of IGST Acts, 2017. Accordingly, I find that the amount Rs. 6,28,27,403/- (Rupees Six Crore Twenty-Eight Lakh Twenty-Seven Thous....
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....of the DRI Rules, no prosecution could be instituted even in respect of an act which was an offence when the rule was in force. The other aspect as regards the applicability of Section 6 of the General Clauses Act, 1897 was also considered in the above case wherein the Hon'ble Supreme Court in paragraphs 17 and 18 had been, inter alia, pleased to observe as follows:- "17. Reference was next made to a decision of the Madhya Pradesh High Court in State of M.P. v. Hiralal Sutwala [1958 SCC OnLine MP 149 : AIR 1959 MP 93] but, there again, the accused was sought to be prosecuted for an offence punishable under an Act on the repeal of which Section 6 of the General Clauses Act had been made applicable. In the case before us, Section 6 of the General Clauses Act cannot obviously apply on the omission of Rule 132-A of the DIRs for the two obvious reasons that Section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a rule. If Section 6 of the General Clauses Act had been applied, no doubt this complaint against the two accused for the offence punishable under Rule 132-A of the DIRs could have been instituted ....
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....mission of Rule 132-A of the DIRs, no prosecution could be instituted even in respect of an act which was an offence when that rule was in force." 27. Again, in the case of Kolhapur Canesugar Works Ltd. (supra) the Hon'ble Supreme Court while considering the scope of omission of Rule 10 and 10A of the Central Excise Rules, 1944 with effect from 6th October, 1977 had observed that General Clauses Act is only applicable to a Central Act or Regulation. The same applies only to the repeal of an Act and not to the omission of the Rule. To morefully appreciate the same paragraphs 32, 33 and 34 are extracted hereinbelow:- 32. We have carefully considered the decisions in Saurashtra Cement and Chemical Industries [(1993) 42 ECC 126 (Guj) (FB)] and Falcon Tyres case [(1992) 60 ELT 116 (Kant)]. Though the judgments in these cases were rendered after the decision of the Constitution Bench in Rayala Corpn. (P) Ltd. [(1969) 2 SCC 412 : (1970) 1 SCR 639] a different view has been taken by the High Courts for the reasons stated in the judgments. The Full Bench of the Gujarat High Court in Saurashtra Cement and Chemical Industries [(1993) 42 ECC 126 (Guj) (FB)] as it appears from the d....
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.... of the judgment the Full Bench has noted the decision of a Constitution Bench of this Court in Chief Inspector of Mines v. Karam Chand Thapar [AIR 1961 SC 838] and has relied upon the principles laid down therein. The Full Bench overlooked the position that that was a case under Section 24 of the General Clauses Act which makes provision for continuation of orders, notification, scheme, rule, form or bye-law, issued under the repealed Act or regulation under an Act after its repeal and reenactment. In that case Section 6 did not come up for consideration. Therefore the ratio of that case is not applicable to the present case. With respect we agree with the principles laid down by the Constitution Bench in Rayala Corpn. case [(1969) 2 SCC 412 : (1970) 1 SCR 639]. In our considered view the ratio of the said decision squarely applies to the case on hand." 28. In this context, I may note that in the judgement of the Bombay High Court in the case of Hikal Limited (supra), an identical question fell for consideration where the Hon'ble Bombay High Court in paragraph 122 thereof by noting the absence of the saving clause was pleased to, inter alia, return the following findin....