Case Note & Summary
The petitioner, Sunlight Cable Industries, exported insulated cables to M/s. Khin Maung Tum & Brothers Co. Ltd., Myanmar, and paid Integrated Goods and Services Tax (IGST) of Rs. 21,41,451/-. The export was a zero-rated supply under Section 16(3) of the IGST Act, entitling the petitioner to a refund. However, while filing the GST return in Form GSTR-1 for August 2017, the petitioner inadvertently mentioned an incorrect invoice number and port code. Upon realizing the mistake, the petitioner filed an amended return for January 2018 in February 2018, correcting the details. Subsequently, in January 2019, the petitioner submitted an annexure establishing concordance between the tax invoice and shipping bill as per departmental circulars. In March 2019, the petitioner applied for the refund and also submitted a certificate of amendment issued by the customs authorities amending the shipping bill. Despite these compliances, the refund was not processed. The petitioner then approached the High Court under Article 226 of the Constitution. The respondents opposed the petition, arguing that the petitioner had not complied with the requirements of Rule 96 of the CGST Rules and that the error in the return could not be rectified after the due date. The court, however, held that the error was inadvertent and that the petitioner had taken all necessary steps to correct it. The court noted that the respondents had not disputed the fact of export or the payment of IGST. The court directed the respondents to process the refund within four weeks, emphasizing that procedural irregularities should not defeat substantive rights.
Headnote
A) Customs and GST - Refund of IGST on Exports - Zero Rated Supply - Section 16(3) of IGST Act, 2017 read with Section 54 of CGST Act, 2017 and Rule 96 of CGST Rules, 2017 - Petitioner exported insulated cables to Myanmar and paid IGST, but inadvertently mentioned incorrect invoice number and port code in GSTR-1 - Petitioner later filed amended return and submitted concordance documents - Held that the error was inadvertent and procedural, and the petitioner had complied with all requirements; the respondents were directed to process the refund of Rs. 21,41,451/- within four weeks (Paras 2-10).
Issue of Consideration
Whether the petitioner is entitled to refund of IGST paid on exports despite an inadvertent error in mentioning invoice number and port code in the original GST return, and whether the subsequent amendment and compliance with departmental circulars entitles the petitioner to the refund.
Final Decision
The court allowed the writ petition and directed the respondents to process the refund of Rs. 21,41,451/- within four weeks from the date of the order.
Law Points
- Refund of IGST on zero-rated supply
- amendment of GST returns
- procedural compliance
- Section 16(3) IGST Act
- Section 54 CGST Act
- Rule 96 CGST Rules
- Article 226 Constitution of India
Case Details
2023 LawText (BOM) (06) 136
WRIT PETITION NO.284 OF 2021
G.S. Kulkarni, Jitendra Jain
Mr. Prathamesh Gargate, a/w. Mr. Bharat Raichandani, i/b. UBR Legal, for the Petitioner. Mr. Jitendra B. Mishra, a/w. Ms. Sangeeta Yadav, for the Respondents.
Sunlight Cable Industries
The Commissioner of Customs NS II And 2 Ors.
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India seeking refund of IGST paid on exports.
Remedy Sought
Petitioner sought a direction to the respondents to grant refund of IGST of Rs. 21,41,451/- paid on export of insulated cables to Myanmar.
Filing Reason
The petitioner's refund claim was denied by Respondent No.2 despite the petitioner having complied with all procedural requirements, including filing an amended return and submitting concordance documents.
Issues
Whether the petitioner is entitled to refund of IGST on zero-rated supply despite an inadvertent error in the original GST return?
Whether the respondents were justified in denying the refund on the ground of non-compliance with Rule 96 of CGST Rules?
Submissions/Arguments
Petitioner argued that the export was a zero-rated supply under Section 16(3) of IGST Act, and the refund was legitimately due. The error in the return was inadvertent and was corrected by filing an amended return and submitting necessary documents as per departmental circulars.
Respondents argued that the petitioner had not complied with the requirements of Rule 96 of CGST Rules and that the error in the return could not be rectified after the due date.
Ratio Decidendi
An inadvertent error in mentioning invoice number and port code in the GST return does not disentitle an exporter to refund of IGST on zero-rated supply, provided the exporter has taken corrective steps and complied with procedural requirements. Substantive rights should not be defeated by procedural irregularities.
Judgment Excerpts
The Petitioner has contended that such claim of the Petitioner, which is for an amount of Rs. 21,41,451/-, has been denied by Respondent No.2, which was legitimately due to the Petitioner, being a zero rated supply in terms of Section 16(3) of the Integrated Goods and Services Tax Act, 2017 (“IGST Act”) read with Section 54 of the Central Goods and Services Tax Act, 2017 (“CGST Act) and Rule 96 of the Central Goods and Services Tax Rules, 2017 (“CGST Rules”).
The Petitioner has contended that on 19th December 2017, the Petitioner had filed a GST Return in Form No.GSTR-1 for the month of August 2017, inadvertently mentioning an incorrect Invoice No. and Port Code in respect of export transaction made vide Tax Invoice No. SUN/03/2017-18 and corresponding Shipping Bill No.8360082.
Procedural History
The petitioner filed GST return for August 2017 on 19 December 2017 with incorrect invoice number and port code. On 22 February 2018, petitioner filed amended return for January 2018 correcting the details. On 9 January 2019, petitioner submitted concordance annexure. On 15 March 2019, petitioner applied for refund. On 24 March 2019, certificate of amendment of shipping bill was issued. Refund not processed; petitioner sent letter on 29 August 2019 to Commissioner of GST. Additional Commissioner wrote to Commissioner on 24 September 2019. Petitioner re-submitted documents. Thereafter, petitioner filed writ petition on 2021.
Acts & Sections
- Integrated Goods and Services Tax Act, 2017: Section 16(3)
- Central Goods and Services Tax Act, 2017: Section 54
- Central Goods and Services Tax Rules, 2017: Rule 96
- Constitution of India: Article 226
