The Madras High Court ruled that the procedural irregularity should not come in legitimate way of grant of export incentives.
The court noted that the petitioner is admittedly a 100% Export Oriented Unit [EOU] and has wrongly availed the benefit of refund under Rule 96 of CGST Rules, 2017 seeking to grant refund of input tax credit availed and utilized in discharging IGST on the exported goods. It is however subjected to rider or limitation under Rule 96(10) of the CGST Rules, 2017.
The bench said that the petitioner is perhaps entitled to exemption under Rule 89 of the CGST Rules, 2017, as the petitioner has received inputs under CBEC Notification.
The court viewed that the procedural irregularity committed by the petitioner should not come in the legitimate way of grant of export incentives as admittedly exports were made and the refund claims were itself based on the shipping bills.
The Court has repeatedly held that procedural irregularity should come in the legitimate way of grant of export incentives.
The court relied on the judgment of the Supreme Court in Commissioner of Sales Tax, Uttar Pradesh Vs. Auriaya Chamber of Commerce, Allahabad, wherein, it has been held that the rules or procedures are hand-maids of justice not its mistress.
Facts
The petitioner is a 100% Export Oriented Unit [EOU] and had exported goods out of country and that by mistake, the petitioner had wrongly claimed refund under Rule 96 of the CGST Rules, 2017 on the IGST paid by the petitioner on capital goods and inputs utilized for export of goods instead of Rule 89 of the CGST Rules, 2017.
Contentions
Counsel for the petitioner submitted that the shipping bills that were filed for export of the goods were treated as the refund claim for the purpose of Rule 96 of the CGST Rules.
It is further submitted that the amount has been remitted by debiting the Electronic Cash Register of the petitioner. It is submitted that this was possible only in view of the amendment to Rule 96 of the CGST Rules, 2017, which replaced Sub-Rule 5A, 5B and 5C.
It is therefore submitted that the liability has been squared up and therefore, the order be quashed.
Conclusion
The court held that the legitimate export incentives ought to be granted as an exporter competes in the international market. Under these circumstances, the order was set aside by the court and the case was remitted back to the respondent to pass fresh order by examining the exports made by the petitioner for grant of refund under Rule 89 of the CGST Rules, 2017 in terms of Section 16(3) of the IGST Act, 2017.
Case Details
Case Name: M/s.Shobikaa Impex Private Limited v/s Union of India and Ors.
Citation: W.P.(MD) No.13263 of 2022
Counsel for Petitioner : Mr.S.Durairaj
Counsel for Respondent : Mr.V.Malaiyendran Central Government Standing Counsel
Court: Madurai Bench Of Madras High Court
Judge: Justice C. Saravanan
Decision Date: 01/07/2024
