Choksi Exports Vs Union of India (Gujarat High Court)
The Hon’ble Gujarat High Court in M/s Choksi Exports v. Union of India [R/Special Civil Application No. 23798 of 2022 dated February 03, 2023] has held that, the Revenue Department cannot withheld the refund on the grounds that the assessee had been marked as “risky exporters”, when the assessee has not been prosecuted under the Central Goods and Service Tax Act, 2017 (“the CGST Act”) and has also reversed the Input Tax Credit (“ITC”) towards the goods purchased from a risky supplier. Directed the Revenue Department to grant the Integrated Goods and Service Tax (“IGST”) refund to the assessee within 3 weeks.
Facts:
M/s Choksi Exports (“the Petitioner”) is a partnership firm engaged in the business of manufacturing and exporting of Organic pigments. The Petitioner has been marked as ‘Risky Exporters’ by the Revenue Department (“the Respondent”) for which the Petitioner’s refund of IGST amounting to INR 14,80,27,927.67/- was withheld on marking the Petitioner as risky exporter, whereby, the Petitioner also submitted all the relevant information as prescribed under Circular No.131/1/2020-GST dated January 23, 2020, vide email dated January 17, 2022 and other compliance was also made. Thereafter, the grievance of the Petitioner was moved by way of grievance application dated June 16, 2022.
The Petitioner has contended that the refund of IGST has been illegally withheld which is violating the provisions of the Section 54(6) of the CGST Act read with Rule 91(1) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”), as the Respondent is bound to issue the refund of 90% of the amount claimed by the registered person within 7 days from the date of refund application. Further, earlier, the Petitioner has exported various goods and had duly received the refund of IGST on those exports.
However, due to the pendency of the fund, the Petitioner has been suffering the financial loss of INR 11,00,000/- and is on the verge of shutting down its operations.
Issue:
Whether the withholding of IGST refund claim of the Petitioner is violating Section 54(6) of the CGST Act read with Rule 91(1) of the CGST Rules?
Held:
The Hon’ble Gujarat High Court in R/Special Civil Application No. 23798 of 2022 held as under:
