Blog No. 44: Drawback claimed at higher rate – Non observance of judicial precedents – Refund IGST with interest from beginning

In a recent case, Hon’ble Guj High Court observed that the decision in subject case is squarely covered by the decision of this court delivered vide order dated 27.06.2019. Therefore, the tendency of the respondents in not sanctioning the refund despite judicial precedent being on records needs to be deprecated.

Therefore, Hon’ble court ordered to sanction the refund along with interest starting from 01.07.2019. Read more about the case [Jal Engineering Vs UOI 2022 (2) TMI 441] below:

Facts of the Case

1. During September 2017, petitioner exported goods for Rs. 78,83,246/- and paid IGST thereon for Rs. 17,30,468/-
2. In the Shipping Bill, the petitioner mistakenly opted for claiming drawback at higher rate. Due to selection of this option, the EDI system did not permit the refund of IGST paid and furnished in GST returns.
3. Circular 05/2018-Customs dated 23.02.2018 was issued for correcting the errors committed at initial stages by exporters, and the petitioner corrected the errors in terms of said circular.
4. The notable point in this case is that the higher as well as lower rate of drawback is same i.e., 2%.
5. The department argued that the petitioner is not related to the category of withholding the refund claim. As the petitioner has opted to claim drawback at higher rate, their claim of IGST refund is non-est.

Observations of the Court

6. The SLP filed against the case of Amit Cotton Industries though dismissed by SC on grounds of delay, the subsequent decision in the case of Awadkrupa Plastomech Pvt Ltd was challenged on merits and the Hon’ble Court dismissed the SLP. Therefore, refund in the present case is also to be permitted.
7. The decision in the case of Amit Cotton Industries was delivered on 27.06.2019. Even though said decision was challenged before SC, one more decision in the case of Awadkrupa Plastomech Pvt Ltd came to be passed on 15.12.2020, and the SLP against this decision came to be dismissed before SC on 30.07.2021.
8. Despite the fact that issue was squarely covered by decisions of High Court, the respondent authorities chosen not to sanction the refund. This tendency of the respondents has been deprecated by this Court in past as well.
9. Respondents authorities are directed to pay interest, at the rate prescribed under the statute, to the petitioner on the amount of refund from 01.07.2019 within a period of six weeks from the date of receipt of a copy of this order.