CASE SUMMARY: JAL
ENGINEERING VS.
UNION OF INDIA THROUGH SECRETARY
R/Special Civil
Application No. 5040 of 2021
Court: High Court Of Gujarat
Date: 16.12.2021
Case Overview:
The petitioner, JAL Engineering
(represented by Partner Karishma Shaikh), filed a petition under Article 226 of
the Constitution of India seeking directions against the Union of India
(represented by the Secretary) for the immediate sanction of refund of
Integrated Goods and Service Tax (IGST) paid on goods exported as zero-rated
supplies.
Facts Of The Case:
JAL Engineering, a partnership firm
engaged in manufacturing and exporting valves, exported goods under shipping
bills dated September 5, 2017 (SB No. 8465051 and 8459617) and September 14,
2017 (SB No. 8455069). The total IGST amount paid was Rs. 17,30,468.
Submission By
Petitioner:
The petitioner claimed that the refund
of IGST was withheld due to a technical error related to the claiming of higher
rate duty drawback instead of IGST refund. They argued that both rates (higher
and lower duty drawback) were at 2%, making the error negligible.
Submission By Respondent:
The Union of India, through its
authorities, opposed the refund on the grounds that the petitioner had opted
for a higher rate of duty drawback which precluded them from claiming IGST
refund under the applicable notifications.
Court Finding and Ruling:
After hearing arguments from both sides,
the Honorable Justices Sonia Gokani and Nisha M. Thakore disagreed with the
respondents' stance. They referred to precedents, particularly the case of Amit Cotton Industries, where it was held that
such technical errors should not prevent the rightful refund under IGST
provisions if the rates involved were the same.
Conclusion:
The Court directed the respondents to
sanction the refund of IGST to the petitioner, considering that the
petitioner’s case fell within the provisions of
Section 54 of the CGST Act and Section 16 of the IGST Act. The judgment
emphasized that technical errors in claiming duties should not hinder
legitimate refunds where applicable rates remain unchanged.
