Saraf Natural Stone VS Union Of India

The writ application under Article 226 of the Constitution of India seeks judicial relief to address delays in refund processing. The petitioners, a registered partnership firm and a partner of the firm, claim that the respondents’ wrongful actions have adversely affected their business and property rights. They request the court to mandate the respondents to provide compensation and interest for the delay in refunds and to issue any other orders deemed appropriate to ensure justice. They also seek the court to direct the respondents to cover the costs associated with this application. The petitioners allege that the respondents’ actions have caused significant prejudice and financial hardship.

In the writ application under Article 226 of the Constitution of India, the petitioners seek several judicial remedies concerning a delay in receiving a refund and subsequent compensation for the same. The primary requests in their application include:

1. A writ of mandamus or any other appropriate writ to direct the respondents to provide compensation and interest for the delay in refund processing

2. Any other orders, directions, writs, or reliefs deemed appropriate by the court to serve the interests of justice

3. An order for the respondents to cover the costs associated with the application

The petitioners describe their situation as follows:

1. Petitioner no 1 is a registered partnership firm with a registration number of 99984019206, headquartered in Ahmedabad, Gujarat. This firm is registered under the CGST and IGST Acts of 2017 with the registration number 24ADDFS3029H1ZA

2. Petitioner no 2 is an Indian citizen and a partner in petitioner no 1’s firm. The actions of the respondents have adversely affected his ability to conduct business and hold property through petitioner no 1, due to what is claimed to be wrongful and illegal conduct by the respondents

The respondents involved are:

1. Union of India (Respondent no 1), represented by the Ministry of Finance, Department of Revenue, responsible for enacting and notifying the IGST Act, 2017, and setting related rules

2. Central Board of Indirect Tax and Customs (CBIC) (Respondent no 2), part of the Department of Revenue, charged with implementing the rules formulated by the Union of India

3. Goods and Services Tax Network (GSTN) (Respondent no 3), a non-governmental, private limited company established under Section 8. GSTN is tasked with providing IT infrastructure and services crucial for the implementation of GST for the Central and State Governments, taxpayers, and other stakeholders

The petitioners argue that the delay and the ensuing complications have significantly harmed their business operations and rights, seeking judicial intervention to resolve the issues and secure the rightful compensation and interest due for the refund delay.

The petitioners in this case contend that the legal issue at hand falls within the jurisdiction of the Hon’ble Court. They assert that the basis for their action involves the interpretation and application of Section 16 of the IGST Act, 2017, which pertains to the refund of taxes on exported goods. According to this section, registered entities exporting goods outside India are eligible to claim a refund for either the unutilized input tax credit on the goods exported under a bond or letter of undertaking, or the integrated tax paid on such exports.

Additionally, the petitioners refer to Section 16(3) of the IGST Act, which stipulates that the refund must be claimed following the procedures outlined in Section 54 of the CGST Act and the corresponding rules. They highlight that Section 20 of the IGST Act further clarifies that the provisions related to refunds under the CGST Act should be applied, as far as applicable, to the integrated tax, essentially treating them as if they were part of the IGST Act. This indicates a legislative intent to ensure consistency and procedural alignment between the IGST and CGST Acts concerning refunds related to exported goods.

The petitioners’ argument centers around the procedural aspects of claiming refunds, emphasizing the importance of adhering to these statutory provisions to secure the entitled refunds for their exported goods.

The petitioners in this case assert that the cause of action has occurred within the territorial jurisdiction of the court in question. They cite Section 16 of the IGST Act, 2017, which allows registered persons who export goods outside India to claim a refund. This refund can be either for the unutilized input tax credit on export of goods under bond or letter of undertaking, or for the integrated tax paid on such exports.

According to the petitioners, Section 16(3) of the IGST Act stipulates that the refund must be claimed following the provisions of Section 54 of the CGST Act or the related rules. Additionally, Section 20 of the IGST Act clarifies that the CGST Act’s provisions regarding refunds apply, as much as possible, to the integrated tax in the same manner as they do to the central tax, as if they were part of the IGST Act itself.

Rule 2 of the Integrated Goods and Services Tax Rules, 2017, specifies that the CGST Rules of 2017 should be applied to the integrated tax in a manner similar to their application to the central tax. The petitioners note that Section 54 of the CGST Act mandates the refund to be processed in a time-bound manner.

The petitioners also refer to Rule 91 of the CGST Rules, 2017, which states that a provisional refund should be granted within seven days from the acknowledgment of the refund claim. The order for this provisional refund should be issued in Form GST RFD-04 along with a payment advice in Form GST RFD-05, and the amount should be electronically credited to the claimant’s bank account. Furthermore, Rule 90 of the CGST Rules requires that acknowledgment for a refund application in Form GST RFD-02 be provided through the common portal within fifteen days of the application filing. If there are any deficiencies, the proper officer must notify the applicant through the common portal in Form GST RFD-03, asking them to file a corrected refund application.

From the provisions of Section 54(6) of the CGST Act and Rule 91 of the CGST Rules, it is evident that a registered person exporting goods is entitled to a provisional refund amounting to 90% of the claimed refund. The petitioners are highlighting these legal frameworks to support their claim and ensure timely processing of their refund applications.

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