Facts of the Case

M/s Schneider Electric Private Limited filed this writ petition challenging a Show Cause Notice dated 30.06.2023, issued in FORM-GST-RFD-08 by the jurisdictional Assistant Commissioner of Commercial Taxes, proposing to reject the petitioner's claim for refund of tax paid on inputs relating to export of services for the period April 2021 to March 2022, amounting to Rs. 4,36,24,616. The petitioner sought quashing of the notice and a mandamus directing sanction of the refund.

Issues Involved

  1. Whether the impugned Show Cause Notice dated 30.06.2023, proposing to deny the export-services input tax refund, was sustainable.
  2. Whether the petitioner was entitled to a direction for sanction of the claimed refund of Rs. 4,36,24,616.

Petitioner's Arguments

  • Sought quashing of the Show Cause Notice dated 30.06.2023 and a mandamus directing the Assistant Commissioner to sanction the refund of tax paid on inputs relating to export of services.

Respondent's Arguments

  • The High Court Government Pleader informed the Court that the impugned Show Cause Notice had, in effect, been withdrawn, and a fresh/revised notice had been issued on 01.08.2023 in which the GST demand originally proposed had been dropped ('eschewed'); it was submitted that the petitioner could reply to this revised notice, and that no precipitative action would be taken until a decision was made.

Court Order / Findings

  • Noted the Revenue's fair stand that the original Show Cause Notice had effectively been superseded by the revised notice dated 01.08.2023, which no longer pressed the GST demand.
  • Disposed of the petition, confining the matter to the Revised Notice, with the original impugned notice treated as having 'paled into insignificance'; all of the petitioner's contentions were kept open.
  • Granted the petitioner four weeks to file a reply to the Revised Notice, followed by a further four weeks for the department to take a decision on that reply.
  • Directed 'costs made easy' (i.e., no separate order as to costs).

Important Clarification

The Court did not rule on whether the petitioner is actually entitled to the Rs. 4.36 crore export-services refund — that question remains entirely open and will now be decided by the tax department based on the petitioner's reply to the revised show cause notice. This order simply records the department's decision to withdraw its original notice and re-proceed on a fresh basis.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — Section 54 (refund of tax) and related rules governing refund of unutilised input tax credit on export of services
  • FORM GST RFD-08, Central Goods and Services Tax Rules, 2017 — the prescribed format for a refund show cause notice

Decision – In Favour of

No merits decided — the petition was disposed of on the department's own withdrawal of the original notice; the petitioner's refund entitlement remains to be determined afresh through the revised notice process, with all contentions kept open.

Case Details

High Court of Karnataka at Bengaluru; Writ Petition No. 16229 of 2023 (T-RES); Neutral Citation: 2023:KHC:30055; Coram: Hon'ble Mr Justice Krishna S Dixit; Date of Order: 23.08.2023.

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