Facts of the Case

The petitioner, Ms MG Global, an exporter, had been flagged as a "risky exporter" by the Directorate General of Analytics and Risk Management, leading to an alert against it. As a consequence, the petitioner's claim for refund of Integrated Goods and Services Tax (IGST) and duty drawback was not processed, and all its export consignments were subjected to 100% examination. The petitioner had satisfactorily responded to all queries raised by the respondents and contended that the alert ought to be lifted. It approached the Delhi High Court by way of a writ petition seeking a mandamus directing issuance of a No Objection Certificate under CBIC Circular No.131/1/2020-GST dated 23.01.2020 (as modified by Circular dated 20.05.2020) and consequential release of the IGST refund and duty drawback. The matter was heard and disposed of by a Division Bench on 09.05.2023.

Issues Involved

  1. Whether the petitioner was entitled to release of its IGST refund and duty drawback once the risky-exporter alert against it stood resolved.
  2. Which authority — Customs or the jurisdictional GST Commissioner — was required to process the pending IGST refund.

Petitioner's Arguments

  • The petitioner submitted that it had duly responded to all queries raised regarding the risky-exporter alert and that the alert deserved to be lifted.
  • It sought a mandamus directing issuance of an NOC per the CBIC's Standard Operating Procedure and consequential release of its IGST refund and duty drawback, along with costs.

Respondent's Arguments

  • Counsel for the respondents (CBIC) submitted that the petitioner's grievance had already been addressed and that the alert had been lifted.
  • It was stated that the duty drawback claim would now be processed in the normal course, and any impediment could be resolved by approaching a named Assistant Commissioner at ICD Patparganj.
  • On the IGST refund, it was submitted that processing now falls to the jurisdictional Commissioner rather than Customs authorities, and that the officer would process the petitioner's claim as well.

Court Order / Findings

  • The Court noted that the alert against the petitioner had been lifted and that duty drawback would be processed in the ordinary course.
  • On IGST refund, the Court held that since the alert stood resolved, the jurisdictional Commissioner (and not Customs authorities) was required to process the refund in accordance with law on the strength of the order.
  • Liberty was reserved to the petitioner to file a fresh application, annexing a copy of the order, if the refund was not processed.
  • The writ petition was disposed of with no further orders required.

Important Clarification

  • Once a risky-exporter alert is lifted after the exporter satisfactorily responds to queries, both duty drawback and the pending IGST refund must be processed without further impediment.
  • Following the shift under the CBIC's revised SOP, IGST refunds held up on account of a risky-exporter alert are to be processed by the jurisdictional GST Commissioner, not by Customs authorities, once the alert is resolved.

Sections Involved

  • CBIC Circular No.131/1/2020-GST dated 23.01.2020 (as modified by Circular dated 20.05.2020) – lays down the SOP for verification and resolution of risky-exporter alerts and consequential release of refund/drawback.
  • Integrated Goods and Services Tax Act, 2017 – governs IGST refund on export of goods, withheld here pending resolution of the risky-exporter flag.

Decision – In Favour of

The disposal was in favour of the Assessee — the alert stood lifted, duty drawback was to proceed in the ordinary course, and the jurisdictional Commissioner was directed to process the IGST refund on the strength of the order, with liberty reserved to the petitioner in case of any further delay.

Case Details

Court: High Court of Delhi at New Delhi
Case No.: W.P.(C) 4760/2023
Coram: Justice Vibhu Bakhru and Justice Amit Mahajan
Date of Order: 09.05.2023

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