Case Title | RAGHAV VENTURES vs COMMISSIONER OF DELHI GOODS & SERVICES TAX |
Court | Delhi High Court |
Honorable Judges | JUSTICE SANJEEV SACHDEVA JUSTICE RAVINDER DUDEJA |
Citation | 2024 (03) GSTPanacea 26 HC Delhi W.P.(C) 12209/2023 & CM APPL. 47988/2023 |
Judgment Date | 01-March-2024 |
The present Writ Petition has been lodged with the aim of compelling the respondent to provide full IGST refund amounting to Rs. 2,44,75,410/- for the tax periods spanning December 2022, February 2023, March 2023, and May 2023, coupled with interest as stipulated under Section 56 of the DGST/CGST Act.
The petitioner, engaged in the export of mobile phones from various brands along with accessories, commenced their export activities in April 2022. The mobile phones and accompanying accessories were dispatched to M/s AZ Logistic located in Dubai, UAE, with payment of Integrated Goods & Service Tax [IGST]. To facilitate the refund process, the petitioner regularly filed shipping bills, which were subsequently processed by Customs through ICEGATE, leading to the release of the said bills.
However, despite the regular compliance and submission of requisite documents for claiming refunds in the usual course, the petitioner has encountered delays and hurdles in receiving the rightful IGST refund for the specified tax periods. Thus, the petition seeks judicial intervention to direct the respondent to expedite the refund process and disburse the outstanding amount along with accrued interest as mandated by relevant legal provisions.
The petitioner in this case highlights a series of export transactions involving mobile phones and accessories over several months, spanning from December 2022 to May 2023. In December 2022, mobiles worth Rs. 9,06,49,174/- were exported, with an Integrated Goods and Services Tax (IGST) payment of Rs. 1,63,16,851/-. In February 2023, exports amounted to Rs. 2,80,38,271/-, with an IGST payment of Rs. 50,46,889/-. March 2023 saw exports worth Rs. 95,90,489/-, with IGST payment of Rs. 17,26,288/-. In May 2023, mobiles and accessories worth Rs. 76,96,568/- were exported, with IGST of Rs. 13,85,382/- paid.
The petitioner argues their entitlement to a refund based on Rule 96(2) of the CGST/DGST Rules, 2017. According to this rule, export invoice details are transmitted electronically from the common portal to the Customs system, which subsequently confirms the exportation of goods out of India. Following this confirmation, refunds are processed by Customs through ICEGATE as per Rule 96(3).
Section 54 of the CGST/DGST Act, 2017, is cited, stating that any individual seeking a refund of taxes, interest, or other amounts must submit an application within two years from the relevant date, following the prescribed form and manner. The petitioner presumably asserts compliance with these regulations to support their claim for a refund.
The petitioner in this case has furnished returns in FORM-GSTR-3B and submitted applications for refund via FORM-GST-RFD01. Acknowledgments in the form of FORM-GST-RFD-02 were generated by the system, confirming the receipt of these refund applications. The petitioner’s claim revolves around the refund of IGST for tax periods spanning December 2022, February 2023, March 2023, and May 2023, which were reportedly sanctioned but without the inclusion of interest. The petitioner asserts that the refunded amount was credited to their account on 04.12.2023. Subsequently, on 06.12.2023, an application was submitted to the Special Commissioner of the Department of Trade & Taxes, requesting interest at a rate of 6% from the date of filing the refund applications until 03.12.2023.
The respondent’s counsel raises objections to granting interest, arguing that the petitioner’s claim via FORM-GST-RFD-01 solely pertained to integrated tax, without any mention of interest on the amount. Therefore, it is contended that the petitioner is not entitled to interest on the tax amount.
In response to these arguments, Section 56 of the CGST/DGST Act is cited, which addresses interest on delayed refunds. It stipulates that if any tax ordered to be refunded under Section 54(5) is not refunded within 60 days from the date of application receipt under Section 54(1), interest at a rate of 6% becomes payable from the day immediately following the expiry of the 60-day period until the actual refund date.
The petitioner’s counsel highlights Para 34 of a Circular issued by CBEC dated 18.11.2019, which states that interest is applicable on delayed refunds. This circular is crucial in interpreting the entitlement to interest on refunds, as it underscores the importance of providing interest when refunds are delayed beyond the stipulated timeframe.
Overall, the case revolves around the petitioner’s claim for interest on refunded IGST amounts for specific tax periods. While the respondent contests this claim citing procedural shortcomings in the refund application, the petitioner invokes relevant legal provisions and circulars to support their argument for the grant of interest on the refunded amount.
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