H K Enterprise Vs Union of India & Ors. (Gujarat High Court)
Summary: In H K Enterprise Vs Union of India & Ors. [R/Special Civil Application No. 14119 of 2024], the Gujarat High Court addressed the issue of a GST refund claim for Integrated Goods and Services Tax (IGST) paid on ocean freight. The petitioner filed for a refund for June 2018, post the Supreme Court’s decision in Mohit Minerals (2022), which struck down Notification No. 10/2017-IT (Rate) mandating IGST on ocean freight under the Reverse Charge Mechanism (RCM). The authorities rejected the refund application, citing a statutory two-year limitation, despite the petitioner’s argument that the claim could only be filed after the Supreme Court’s ruling. The court held that refund claims filed within a reasonable time after the apex court’s judgment could not be deemed time-barred. The court noted that the levy of IGST on ocean freight was unconstitutional and directed the refund to be granted. The decision underscores that statutory limitations must account for subsequent judicial clarifications that alter the tax framework. This judgment emphasizes the need to accommodate taxpayers who act in response to authoritative judicial decisions, ensuring equitable treatment in cases of unconstitutional levies.
Introduction: The Hon’ble Gujarat High Court in the case of H K Enterprise v. Union of India & Ors [R/Special Civil Application No. 14119 of 2024 dated November 27, 2024] quashes rejection of refund application of Integrated Goods and Service Tax (“IGST”) paid on ocean freight filed subsequent to Notification No.10/2017-IT (Rate) dated June 28, 2017 (“the Reverse Charge Notification”) being struck down by Hon’ble Supreme Court in Mohit Minerals case on ground of time bar. Assessee’s refund claim for the unutilized GST paid on Ocean Freight under the Reverse Charge Mechanism (“RCM”) for June 2018 was rejected because it was found to be filed after the statutory two-year period from the relevant date, following judgment in Mohit Minerals case. Accordingly, it was held that the application for refund having been filed within a reasonable time thereafter, cannot be held to be time barred and the writ petition was allowed by quashing the orders.
