Facts of the Case

ABB India Limited, an exporter, sought a declaration that it is eligible for refund of Integrated Goods and Services Tax (IGST) paid on exports between November 2017 and August 2019, and directions to the Chief Commissioner of Customs, Bangalore Zone, and other respondent Customs authorities to grant immediate refund of Rs.2,48,07,674/- and Rs.6,94,26,908/- against specified Shipping Bills, under Section 16 of the IGST Act read with Section 54 of the CGST Act and Rule 96 of the CGST Rules. On earlier hearings, the respondents were directed to disclose reasons for withholding the refund. The Air Cargo Commissionerate, Devanahalli, and ICD, Whitefield, thereafter shared details of the mismatches causing delay, to which the petitioner furnished explanations before final hearing.

Issues Involved

  1. Whether the petitioner was entitled to immediate refund of Rs.2,48,07,674/- for shipping bills with admittedly no mismatch.
  2. Whether the balance refund of Rs.6,94,26,908/-, withheld for Scroll-cancellation, SB006M/SB006L Gateway EGM errors, and incorrect LUT indication, could be resolved administratively under Facility Circular No.09/2018 and its Addendum.
  3. Whether the respondents were obliged to decide the refund, including provisional refund under Section 54(6), within the timelines under Sections 54(5) and 54(7) of the CGST Act.

Petitioner's Arguments

  • The claim of Rs.2,48,07,674/- pertains to shipping bills with no mismatch and ought to have been refunded without delay.
  • The balance claim involves three categories of errors — PAO cancellation of Scroll despite generation, Scroll not being ready, and incorrect LUT indication — each resolvable by the respondents themselves under the Facility Circular/Addendum.
  • None of the respondent Commissionerates ought to have kept the refund pending, compelling the petitioner to approach the Court.
  • Refund of zero-rated supplies must be considered within the Section 54(5)/54(7) timelines, and the petitioner has been denied even the 90% provisional refund under Section 54(6), warranting expedited orders on both provisional and final refund.

Respondent's Arguments

  • Though faceless resolution is the goal, officers must call for necessary details given transactions spanning a long period.
  • The final decision would be taken with due opportunity to the petitioner, through Nodal Officers — Mr. Rajiv Kittur for ICD Whitefield/Bangalore City Commissionerate, and Ms. Madhulatha for Air Cargo Commissionerate.
  • Deciding refund under Section 54(6) requires elaborate submissions, and since the GST Authorities are not parties, no direction should issue on provisional refund or interest.

Court Order/Findings

  • All questions on the mismatches were kept open for decision by the Nodal Officers proposed by the respondents.
  • The petitioner's representative was directed to appear before Mr. Rajiv Kittur on 25.04.2022 and Ms. Madhulatha on 26.04.2022, each at 10:30 a.m., to be heard on the respective mismatches.
  • The Nodal Officers must decide on the petitioner's explanations within four weeks of the respective hearings, and also consider recommendations on provisional refund under Section 54(6) while examining the mismatches.
  • The Customs Officers' jurisdiction to decide provisional refund and interest was left as moot, since the mismatches remain unresolved.
  • Liberty was reserved to the petitioner to approach the Court again if aggrieved by the Nodal Officers' decision or inaction.

Important Clarification

  • Facility Circular No.09/2018 and its Addendum dated 14.03.2018 provide an administrative mechanism for resolving common IGST refund mismatches — Scroll cancellation, SB006M/SB006L errors, incorrect LUT indication — without requiring court intervention.
  • Customs authorities cannot indefinitely withhold refunds where such mismatches are outstanding; the exporter is entitled to a time-bound hearing through designated Nodal Officers.
  • Statutory timelines for provisional and final refund under Section 54 remain relevant even while mismatches are pending resolution.

Sections Involved

  • Section 16 of the Integrated Goods and Services Tax Act, 2017 — zero-rated supply and refund of IGST on exports.
  • Section 54 of the Central Goods and Services Tax Act, 2017 — refund of tax, provisional refund under sub-section (6), and timelines under sub-sections (5) and (7).
  • Rule 96 of the Central Goods and Services Tax Rules, 2017 — procedure for IGST refund on export of goods.
  • Facility Circular No.09/2018 and Addendum dated 14.03.2018 (Customs) — mechanism for resolving Scroll/EGM mismatches delaying IGST refund.

Decision – In Favour of

This is a disposal with directions, not a decision on the merits of the refund claim. The Court did not adjudicate entitlement to the disputed IGST refund amounts; it directed the Nodal Officers to hear the petitioner on the pending mismatches and decide, including on provisional refund, within four weeks, reserving liberty to return to Court if aggrieved. The outcome is procedural, time-bound relief in favour of the Assessee (ABB India Limited), without a substantive finding on refund entitlement.

Related Case Laws

No related case laws on this specific issue are available on this site at present.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: Writ Petition No.337/2022 (T-RES)
  • Coram: Hon'ble Mr. Justice B.M. Shyam Prasad
  • Date of Order: 18 April 2022

Link to Download the Order

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