Facts of the Case

The petitioner, M/s. Parag Corporation, a proprietorship based in Jaipur engaged in the manufacture and trading of furniture, is registered under the Central Goods and Services Tax Act, 2017 with GSTIN 08ABUPJ0221F1ZV. The firm exported furniture from Mundra on payment of IGST during January 2020 and claimed a refund of Rs. 24,56,610/- under Section 54 of the CGST Act, 2017 read with Rule 96 of the CGST Rules, 2017 and Section 16 of the IGST Act, 2017. Due to an alleged clerical error at the time of filing GSTR-1, a show cause notice was issued on 21.12.2021 asking why the refund claim should not be rejected. The petitioner filed a detailed reply relying on a GSTR-3B/GSTR-1 tax liability comparison. The Assistant Commissioner nevertheless rejected the refund by order dated 13.01.2022, holding that no excess payment for January 2020 was discernible from the returns. Aggrieved, the petitioner approached the Rajasthan High Court under Article 226 seeking a direction to reconcile the GSTR-1 return and release the refund.

Issues Involved

  1. Whether the writ court could examine, on merits, the disputed factual question of whether excess IGST had actually been paid and was refundable.
  2. Whether the existence of an efficacious statutory appellate remedy under Section 107 of the CGST Act barred entertaining the writ petition.

Petitioner's Arguments

  • The refund of Rs. 24,56,610/- was legitimately due under Section 54 of the CGST Act read with Rule 96 of the CGST Rules and Section 16 of the IGST Act.
  • The mismatch arose from a clerical/accounting error in reporting export invoices in GSTR-1, not from any actual excess or short payment of tax.
  • A detailed reply with a GSTR-3B/GSTR-1 comparison was filed to the show cause notice, which was not properly appreciated by the adjudicating authority.
  • Sought a direction commanding the department to permit correction of GSTR-1 and release the refund.

Respondent's Arguments

  • On examination of the RFD-09 reply, the claimant failed to establish that any excess payment of Rs. 24,56,610/- had been made in January 2020.
  • Comparison of GSTR-3B and GSTR-1 for January 2020 showed no excess payment; the tax liability disclosed in Table 3.1(d) of GSTR-3B corresponded to exports verified against the shipping bills in GSTR-1.
  • The refund claim was accordingly rejected on the reasons recorded in the adjudication order.

Court Order / Findings

  • The case involved disputed questions of fact—whether the goods were zero-rated supplies, whether the refund was permissible under Section 54, and whether the prescribed format was properly filed.
  • Applying Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1, the Court reiterated that writ jurisdiction under Article 226 is ordinarily not exercised where an efficacious alternate remedy exists, except in cases of violation of fundamental rights, breach of natural justice, want of jurisdiction, or challenge to vires.
  • None of these exceptions was made out; Section 107 of the CGST Act, 2017 provides a complete appellate mechanism for challenging the adjudicating authority's order.
  • The Court directed that if the petitioner files an appeal, the Appellate Authority shall decide it on merits, in accordance with law and principles of natural justice, within three months.

Important Clarification

  • Disputes involving reconciliation of GSTR-1 and GSTR-3B data to determine the factual quantum of a refund are not amenable to writ adjudication where the statute provides a complete appellate remedy.
  • The three well-recognised exceptions to the alternate-remedy rule—breach of natural justice, jurisdictional error, and challenge to vires—must be pleaded and demonstrated, not merely asserted, before a writ court will bypass Section 107.

Sections Involved

  • Section 54, CGST Act, 2017 — governs refund of tax, including on zero-rated exports.
  • Rule 96, CGST Rules, 2017 — procedure for refund of IGST paid on export of goods.
  • Section 16, IGST Act, 2017 — zero-rating of export supplies and refund entitlement.
  • Section 107, CGST Act, 2017 — appeal to the Appellate Authority against orders of an adjudicating authority.

Decision – In Favour of

Disposed of with directions; not a decision on merits for either side. The petitioner was relegated to the statutory appellate remedy under Section 107 of the CGST Act, with a direction that the appeal, if filed, be decided within three months.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

Court: High Court of Judicature for Rajasthan, Bench at Jaipur
Case No.: D.B. Civil Misc. Writ Petition No. 2772/2022
Coram: Hon'ble Acting Chief Justice Manindra Mohan Shrivastava and Hon'ble Mr. Justice Sameer Jain
Parties: M/s. Parag Corporation vs Principal Commissioner, Commissioner of Customs

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