Non-Transmission of Data Relating to Export From GSTN to ICEGATE Is Not A Valid Ground to Withhold Refund: Bombay High Court

SRC Chemicals Private Limited & Anr. v. Central Board of Indirect Taxes and Customs & Ors.

The Petitioner made certain exports on 28th June 2017, on which date the CGST Act and the IGST were not in force. However, due to reasons beyond the control of the Petitioner, the Shipping Bill did not get printed immediately but got printed on 1st July 2017 on which date GST had come into force. Since GST had come into force on this date, the Shipping Bill got printed with the GST Identification Number of the Petitioner. Since export of goods is regarded as “Zero rated supply” under the GST law, the Petitioner had an option to export the goods under a bond or a letter of undertaking without payment of IGST or to pay the IGST on the exported goods and claim the same as refund.

 

The Petitioner paid IGST of Rs. 22,92,587/- and claimed refund. However, the refund was denied to the Petitioner on the ground that the data pertaining to the Shipping Bill was not transmitted from GSTN to ICEGATE i.e. the two information technology systems maintained by the CBIC.

 

Even the Commissioner of Customs (Respondent No. 4) had addressed a letter to the Directorate General of Systems and Management (Respondent No. 6) in order to resolve the issue pertaining to the pending refund on account of the non-transmission of data pertaining to the Shipping Bill from GSTN to ICEGATE.

 

The Court held that it is not the Petitioner’s problem if the data pertaining to the Shipping Bill was not transmitted from GSTN to ICEGATE and further held that it was the responsibility of the Directorate General of Systems and Management (Respondent No. 6) to process the refund which was pending since 4 and a half years. Despite the same, the Court held that Respondent No. 6 did nothing to resolve the problem of the Petitioner.

In these circumstances, the Court directed the CBIC to ensure that the Petitioner was paid the refund with interest @ 9% p.a. from the date of filing of the Petition within a period of 4 weeks. The Court also imposed costs of Rs. 25,000/- on the CBIC/ the Respondents.

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