Case Law Details
Fives Call – KCP Ltd. Vs Chief Commissioner of Customs (Madras High Court)
The writ petition challenged the proceedings dated 09.09.2022 issued by the third respondent rejecting the petitioner’s claim for refund of Integrated Goods and Services Tax (IGST). The refund was rejected on the ground that the petitioner had claimed the higher rate of duty drawback by relying on Circular No. 37/2018 dated 09.10.2018. According to the impugned proceedings, the petitioner had suffixed “A” to the Drawback Scheme Code in Shipping Bills Serial Nos. 1 to 14, indicating an intention to avail the higher rate of drawback. The order further stated that IGST refunds are processed through a computerized module with inbuilt validations and that where the higher rate of drawback has been availed in any Shipping Bill, the system does not permit processing of the IGST refund. On that basis, the petitioner was held ineligible for the IGST refund in terms of Board’s Circular No. 37/2018 dated 09.10.2018.
Counsel for the petitioner submitted that Circular No. 37/2018 dated 09.10.2018 had already been declared invalid by the Gujarat High Court in Amit Cotton Industries v. Principal Commissioner of Customs, reported in (2019) 75 GST 33 (Gujarat). It was further submitted that the same judgment had been followed by the Madras High Court in W.P. No. 14847 of 2023 and by a Division Bench of the Madras High Court in M/s. Precot Meridian Limited v. Commissioner of Customs and another, reported in 2020 (1) TMI 90.
The petitioner further submitted that the Circular had been struck down on the ground that it was inconsistent with the statutory provisions and the Rules governing the grant of IGST refund. On that basis, it was contended that the writ petition was liable to be allowed in terms of the earlier decisions.
After considering the submissions and the law laid down in the decisions referred to by the petitioner, the Madras High Court held that the writ petition deserved to be allowed. The Court set aside the impugned proceedings dated 09.09.2022 and directed the third respondent to reconsider the petitioner’s claim for IGST refund afresh in accordance with law. The reconsideration was directed to be undertaken keeping in view the judgments referred to by the Court and the relevant statutory provisions and Rules, after affording the petitioner a reasonable opportunity of hearing. The Court further directed that the exercise be completed within four weeks from the date of receipt of a copy of the order.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The present writ petition has been filed challenging the proceedings dated 09.09.2022 issued by the third respondent, whereby the petitioner’s claim for refund of Integrated Goods and Services Tax (IGST) was rejected on the ground that the petitioner had claimed the higher rate of duty drawback by relying upon Circular No.37/2018 dated 09.10.2018. The relevant portion of the impugned order reads as follows:
“It is seen that the Exporter has suffixed ‘A ‘ to the Drawback Scheme Code in the Shipping Bills (SL Nos. 1 to 14), which indicates that the Exporter intended to avail the higher rate of drawback. In this connection, it is submitted that the IGST refund is processed only through the computerized module with inbuilt validations. If the higher rate of drawback has been availed in any Shipping Bill, the system does not permit processing of the IGST refund.
In view of the above, it is submitted that the exporter is not eligible for IGST refund as the higher rate of drawback has been claimed, in terms of Boards Circular No.37/2018 dated 09.10.2018.”
2. Learned counsel for the petitioner submitted that Circular No.37/2018 dated 09.10.2018 has been declared invalid by the Gujarat High Court in Amit Cotton Industries v. Principal Commissioner of Customs, reported in (2019) 75 GST 33 (Gujarat). It was further submitted that the said judgment has been followed by this Court in W.P. No.14847 of 2023 and also by the Division Bench of this Court in M/s. Precot Meridian Limited v. Commissioner of Customs and another, reported in 2020 (1) TMI 90.
3. The Circular was struck down on the ground that it was inconsistent with the statutory provisions and the Rules governing grant of IGST refund. Therefore, learned counsel submitted that the present writ petition is also liable to be allowed in terms of the aforesaid decisions.
4. Having considered the submissions and in view of the law laid down in the above decisions, this writ petition deserves to be allowed.
5. Accordingly, the impugned proceedings dated 09.09.2022 are set aside. The third respondent is directed to reconsider the petitioner’s claim for refund of IGST afresh, in accordance with law, keeping in view the judgments referred to above and the relevant statutory provisions and Rules, after affording the petitioner a reasonable opportunity of hearing. Such exercise shall be completed within a period of four (4) weeks from the date of receipt of a copy of this order.
6. The writ petition is allowed in the above terms. There shall be no order as to costs.
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