Case Law Details
Real Price Spintex (P.) Ltd. Vs Union of India (Gujarat High Court)
Introduction: In a significant verdict, the Gujarat High Court, in the matter of Real Price Spintex (P.) Ltd. vs Union of India [R/Special Civil Application No. 12978 of 2022 dated December 7, 2023], emphasized that directions issued by the court hold binding authority on the concerned authorities. This ruling serves as a reminder that authorities must adhere to court directives, particularly when exercising powers under Article 226 of the Constitution of India.
Gujarat High Court held that once a court has issued directions, same were binding upon authorities and they cannot take any reason to take a different view than directions issued by Court while exercising powers under Article 226 of Constitution of India. The Authorities have to comply with directions issued by the Court while sanctioning the refund of Integrated Goods and Service Tax (“IGST”) after deducting differential duty drawback with 7 percent simple interest as ordered.
Facts:
Real Prince Spintex (P.) (“the Petitioner”) engaged in the business of trading cotton yarn and cotton waste. Under the GST law, the said export of goods is declared as “zero rated supplies”. As per Section 16 of the Integrated Goods and Service Tax Act, 2017 (“the IGST Act”) provides two options to the Petitioner that is either to pay the IGST and get the refund of payment of IGST or not to pay the IGST and claim the refund of unutilised Input Tax Credit (“ITC”) against bond or letter of undertaking (“LUT”). Thus, under LUT, the Petitioner made exports from July 2017 till the LUT was obtained on payment of the IGST on such exports.
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