Case Note & Summary
The petitioner, Venus Jewel, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court, challenging the refusal of the GST authorities to grant a refund of Integrated Goods and Services Tax (IGST) paid on confirmed exports. The petitioner had exported goods under protest and paid IGST, subsequently filing a refund claim. The respondents, including the Union of India and various GST and customs authorities, rejected the refund claim on the ground of unjust enrichment, asserting that the petitioner had passed on the tax burden to the customers. The petitioner contended that the payment was made under protest and that the doctrine of unjust enrichment should not apply. The court, comprising Justices G.S. Kulkarni and Firdosh P. Pooniwalla, heard the matter and delivered judgment on 8 April 2024. The court held that when a payment is made under protest, the amount is not passed on to the customer, and therefore, the doctrine of unjust enrichment is not attracted. The court set aside the rejection order and directed the respondents to process the refund claim within four weeks, considering the payment as made under protest. The petition was allowed in those terms.
Headnote
A) Indirect Tax - Refund of IGST on Exports - Payment Under Protest - Unjust Enrichment - Section 54 of Central Goods and Services Tax Act, 2017 and Section 16 of Integrated Goods and Services Tax Act, 2017 - The petitioner exported goods under protest and paid IGST, later claimed refund. The respondents rejected the refund on the ground of unjust enrichment. The court held that when payment is made under protest, the doctrine of unjust enrichment does not apply as the amount is not passed on to the customer. The court directed the respondents to process the refund within four weeks. (Paras 1-10) B) Constitutional Law - Writ Jurisdiction - Article 226 of Constitution of India - Refund of Tax - The court exercised its writ jurisdiction to direct the respondents to consider the refund claim afresh, as the rejection was based on an erroneous application of the doctrine of unjust enrichment. (Paras 2, 10)
Issue of Consideration
Whether the petitioner is entitled to refund of IGST paid on exports under protest, and whether the doctrine of unjust enrichment applies to payments made under protest.
Final Decision
The court allowed the petition, set aside the rejection order, and directed the respondents to process the refund claim within four weeks, considering the payment as made under protest.
Law Points
- Refund of IGST on exports
- Payment under protest
- Unjust enrichment
- Section 54 of CGST Act
- 2017
- Section 16 of IGST Act
- Doctrine of unjust enrichment
- Export of goods
- Zero-rated supply
