Aircraft Export IGST Refund Dispute: Karnataka HC Permits Withdrawal of Writ, Liberty Granted to Seek Refund Under CGST Act [Read Order]

The Karnataka High Court has dismissed as withdrawn a writ petition filed by Aviation Management Sales LLC, which had sought a refund of over ₹11.03 crore paid as Integrated Goodsand Services Tax (IGST) and Compensation Cess on the export of an aircraft in 2018.

The petitioner, Aviation Management Sales LLC, challenged the Order-in-Original dated 09.09.2020 and the Order-in-Appeal dated 04.10.2021, both of which had rejected a refund claim filed by the Official Liquidator of the High Court of Karnataka on behalf of the company. The authorities had held that since the aircraft was exported by the company itself, the Liquidator was not entitled to seek a refund.

Counsel for the petitioner argued that despite this finding, the refund was wrongly denied, prompting the writ petition. Also, the Revenue opposed the plea, contending that the company could not challenge orders passed on an application filed by the Liquidator.

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They petitioner counsel submitted that “This being the case, the Petitioner now seeks leave of this Hon'ble Court to withdraw the present writ petition while reserving liberty to file an application under Section 54 of the Central Goods and Services Tax Act, 2017, for refund of the said amount of Rs.11,03,71,781/- admittedly paid by it, especially given that it is a settled position of law that the time period stated in Section 54 is merely directory and not mandatory. In any event, the entire period from the date on which the 4th Respondent filed the refund application on behalf of the Petitioner i.e., 12.03.2020, till the date of disposal of this writ petition ought to stand excluded as per Section 14 of the Limitation Act and in the unique facts and circumstances of this case and in the interests of justice and equity. “

Faced with this objection, the petitioner sought leave to withdraw the writ petition, reserving liberty to file an application under Section 54 of the Central Goods and Services Tax Act, 2017.

After concerning the memo, Justice S. Sunil Dutt Yadav dismissed the petition, while clarifying that all contentions of both sides remain open.

The court held that “In light of the same, petition is dismissed. Liberty is reserved to be pursued as is permissible in law. All contentions of both sides are kept open. “

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