The Gujarat High Court to hear the special leave application requesting to stay the implementation of rule 96B of the CGST Rules, 2017.
The Petitioner, M/s Bhawani Textile challenged the validity of impugned Rule 96B of the Central Goods and Services Rules, 2017 and the Gujarat Goods and Services Rules, 2017 inserted by the Central Board of Indirect Taxes and Customs (CBIC) by way of a Notification no. 16/2020 dated March 23, 2020, on the ground that it has specified a condition of receipt of export proceeds post refund of unutilized input tax credit (ITC) or integrated tax on export of goods which is completely arbitrary, illegal and without the authority of law and further violates Article 14 and Article 19 of Constitution of India.
The petitioner stated that section 54 of the CGST Act, 2017 which deals with a refund of tax, through its sub-section (3) allows a registered person to claim a refund of the unutilized input tax credit at the end of a tax period. It is further stated that as per the provisions of the statute, on satisfying the only criteria for export of goods, a registered person can claim the refund on such export of goods under section 54 of the CGST Act, 2017 which is made without payment of tax under bond or LUT.
No condition has been prescribed in the statute which needs to be fulfilled post receipt of claim for refund under section 54 of the CGST Act, 2017.
The petitioner prayed before the court to issue an appropriate writ, order, or direction and declare the insertion of Rule 96B vide Notification No. 16/2020 – Central Tax dated 23.03.2020 as illegal, ultra vires and without the authority of law. It was further prayed that pending admission, hearing and till final disposal of the petition requested the court to stay the implementation of rule 96B of the CGST Rules, 2017; and to direct the Respondents to not take any coercive action if the proceeds of the export of goods are not received in compliance with the rule 96B of the CGST Rules, 2017.
Advocate Dr. Avinash Poddar appeared for the petitioner.
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