The Gujarat High Court directed to follow Court orders in Integrated Goods and Services Tax ( IGST ) refund cases and observed that directions given by High Courts should be followed by Authorities.
It is the case of the petitioner that as the GST Act was introduced newly in the year 2017, the petitioner erroneously selected the option of export without payment of tax by filing shipping bills for exports even though the petitioner did not have the letter of undertaking and also claimed higher rate of duty drawback under the Customs Act, 1962.
The petitioner accordingly paid IGST on exports along with the returns filed in the Form GSTR3B as the petitioner was liable to pay IGST since letter of undertaking required for making export without payment of tax was obtained only on 27.11.2017.
After scrutiny of the documents provided by the petitioner while the refund of IGST paid on export from October 2017 onwards, refund in relation to the exports made from July to September, 2017 was not granted on the ground that the petitioner had not claimed higher rate of duty drawback.
However, the Deputy Commissioner of Customs passed the order pursuant to the directions of this Court and granted the refund by adjusting the differential duty drawback along with interest at the rate of 15% from the refund entitlement and further granted interest at the rate of 6% instead of 7% as directed by the Gujarat High Court.
Advocate, Uchit Sheth for the petitioner submitted that both the authorities below have committed grave error in implementation of the directions issued by the Gujarat High Court in as much as there is no question of charging interest on the differential duty drawback as the said amount is required to be deducted from the refund of the IGST to which the petitioner was entitled to and the respondent-authority should not have reduced the rate of interest to 6% in spite of the direction issued by the Gujarat High Court which has been confirmed by the Supreme Court.
A Division Bench of Justices Bhargav D Karia and Niral R Mehta observed that “The respondent-authorities and the respondent-authorities had no reason to take a different view than the directions issued by this Court while exercising the powers under Article 226 of the Constitution of India. The respondent-authorities are bound by the directions issued by this Court and therefore, the impugned order is hereby, quashed and set aside. The respondent-authorities are directed to comply with the directions issued by this Court while sanctioning the refund of IGST after deducting the differential duty drawback with 7% simple interest.”
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