Facts of the Case

M/s Nandi Enterprises, a proprietorship registered at Mysuru with GST No. 29AXDPG6252A1ZT, filed a refund application on 16.05.2025 for IGST paid on export of goods amounting to Rs. 45,91,838. After a records-verification letter and the petitioner's reply, a show cause notice dated 17.06.2025 was issued alleging insufficient documentation, following which a personal hearing was held on 04.07.2025 and a further reply was filed. Despite this, the second respondent passed an order dated 14.07.2025 under Section 54 of the CGST/KGST Act read with Rule 89, rejecting the refund for want of sufficient/relevant documents, prompting the petitioner to approach the Karnataka High Court.

Issues Involved

  1. Whether a refund claim rejected for insufficiency of documents should be remanded for fresh consideration where the petitioner attributes the omission to bona fide, unavoidable circumstances.
  2. Whether the petitioner's reliance on other Karnataka High Court rulings on IGST export refunds warranted interference on merits as well.

Petitioner's Arguments

  • Due to bona fide reasons, sufficient cause, and unavoidable circumstances, the relevant documents could not be produced earlier, and if one more opportunity is granted by setting aside the order, all relevant documents sought by the department would be submitted.
  • Even on merits, the petitioner was entitled to the refund, relying on M/s. Amazon Development Centre India Pvt. Ltd. vs Commissioner of Central Tax GST (Appeals), Bengaluru; M/s. Columbia Sportswear India Sourcing Pvt. Ltd. vs Union of India; M/s. Athene Technologies India LLP vs The State of Karnataka; and Nokia Solutions & Networks India Pvt. Ltd. vs The Principal Commissioner of Central Tax.

Respondent's Arguments

  • The HCGP for the respondents submitted that there was no merit in the petition and that it was liable to be dismissed, without specifically countering the bona fide reasons pleaded by the petitioner.

Court Order / Findings

  • Having regard to the petitioner's specific assertion of bona fide inability to submit all relevant documents and the coordinate-bench precedents cited, the Court adopted what it called a justice-oriented approach without deciding the merits of the refund claim itself.
  • The impugned order dated 14.07.2025 was set aside, and the matter was remitted to the second respondent for fresh consideration from the stage of the petitioner submitting all relevant documents sought in the show-cause notice dated 17.06.2025.
  • Liberty was reserved to the petitioner to file further pleadings and documents, which the second respondent shall consider after hearing the petitioner.

Important Clarification

  • Rejection of an IGST export-refund claim purely for want of documents is frequently remanded, rather than finally decided against the exporter, where the exporter offers a bona fide explanation and undertakes to furnish the missing material.
  • A cluster of Karnataka High Court rulings (Amazon Development Centre, Columbia Sportswear, Athene Technologies, Nokia Solutions) is being cited as persuasive authority favouring exporters on IGST refund entitlement, though this order itself did not adjudicate those merits.

Sections Involved

  • Section 54, CGST Act, 2017 – governs refund claims, including IGST paid on export of goods.
  • Rule 89, CGST Rules, 2017 – prescribes the refund application procedure and documentation requirements.
  • Section 56, CGST Act, 2017 – provides for interest on delayed refunds, sought as consequential relief.

Decision – In Favour of

The writ petition was allowed in favour of the assessee to the extent of a remand, with the rejection order set aside and a fresh opportunity granted to substantiate the refund claim.

Case Details

Court: High Court of Karnataka at Bengaluru. Case No.: Writ Petition No. 34570 of 2025 (T-RES). Neutral Citation: 2025:KHC:54066. Coram: Hon'ble Mr. Justice S.R. Krishna Kumar. Date of Order: 16th December, 2025.

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