SRC Chemicals Private Limited & Anr. v. Central Board of Indirect Taxes and Customs & Ors.

Case snapshot

Sections / provisions: 54 of CGST Act and 16 of IGST Act

Questions before the Court / Tribunal

• Refund of IGST paid on exported goods allowed – Technical reason cited by the Customs Authorities i.e. non-transmission of data relating to export from GSTN to ICEGATE not a valid ground to withhold refund lawfully due to an assessee – Costs of Rs. 25,000/- imposed on CBIC. This case underscores the fallibility of digitisation and technology in tax processes and how a taxpayer, who has no control over how the technological system deployed by the Govt. functions, is made to suffer in case of a glitch. The Petitioner made certain exports on 28th June 2017, on which date the CGST Act and the IGST were not in force. However, due to reasons beyond the control of the Petitioner, the Shipping Bill did not get printed immediately but got printed on 1st July 2017 on which date GST had come into force. Since GST had come into force on this date, the Shipping Bill got printed with the GST…
• Which factual, statutory and procedural conditions controlled the requested relief?
• How did the forum apply the governing provisions to the evidence and procedural history recorded in this case?

Material facts and procedural background

rsk 1 / 7 919-WP-5160-21.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL WRIT PETITION NO.5160 OF 2021 SRC Chemicals Private Limited & Anr. ...Petitioners vs. Central Board of Indirect Taxes and Customs through. Dept. of Revenue & Ors. ...Respondents ---- Mr. Rahul Sarda a/w Mr. Sankalp Anantwar, Mr. Tushar Gaikwad, Mt. Pratik Kadav i/b SMA Law Partners for Petitioners. Mr. Vijay Kantharia a/w. Dhananjay B. Deshmukh for the Respondent. ---- CORAM : K. R. SHRIRAM & AMIT B. BORKAR, JJ. DATE : 12th OCTOBER 2021 P . C. : Petitioner has approached this Court for a direction against respondent to refund Integrated Goods and Service Tax (IGST) of Rs.22,92,587 paid by petitioner No.1 in respect of export of goods on 28/6/2017 the date when the provisions for refund and calculation of IGST under the CGST Act and the Integrated Goods and Services Tax Act, 2017 (the "IGST Act") had not been notified. On 1 July 2017, certain provisions of CGST Act and Goods and Services Act came into force. In the year 2017 the Government of India enacted the CGST Act, IGST Act and certain other Acts for introduction of a single unified tax system for imposition of one tax across the country that is Goods and Services Tax (GST).

Since GST was applicable with effect from 1/7/2017 and leviable on the export of goods, the shipping bill got printed on 1/7/2017 with petitioner No.1's GST Identification Number and levy of IGST albeit with the date of 29/6/2017. Copy of the shipping bill is annexed to the Petition. 3. Petitioner has submitted that he has no control over the process of printing the shipping bill at the said port (at the said port office printing the shipping bill is done based on documents submitted by the exporter without any involvement of the exporter). Petitioner submitted that supplies of goods and services for export have been categorized as “Zero Rated Supply” which means that goods could be exported under Bond or Letter of Undertaking without payment of integrated tax followed by claim of refund of unutilized input tax credit or on payment of integrated tax with provision for refund of the tax paid.

Petitioner had no control or role to play in the transmission of data from GSTN to ICEGATE. 4. It is also stated in the petition that sometime in February 2019, the GST portal of Respondent No.1 permitted filing an application for refund in Form GST RFD-01A. Accordingly, on 5/3/2019 petitioner No.1 filed an application for refund in the said form. Petitioner No.1 thereafter received show cause notice from respondent No.3 proposing to reject petitioner’s application for refund. Petitioner No.1 had filed a reply and notwithstanding the reply Respondent No.3 rejected petitioner’s application for refund. Petitioner preferred an appeal before the Commissioner of Central Tax (Appeals-II) Pune which upheld the order passed by respondent No.3 and rejected the appeal on the ground that the jurisdiction of refund of the IGST paid on exported goods was with the Customs

rsk 4 / 7 919-WP-5160-21.doc Department. Therefore it does appear that petitioner's entitlement to refund is yet to be decided. Petitioner kept sending reminders. Respondent No.4 addressed communication dated 10/2/2020 addressed to respondent No.6 stating that the data for the said shipping bill of petitioner was not transmitted from GSTN to ICEGATE and therefore his office is unable to process IGST refund. Respondent No.4 has requested Respondent No.6 to look into the matter and provide suggestions so that refund with reference to Petitioner's shipping bill could be processed. As there was no further response petitioner sent reminders to Respondent No.5 who gave an endorsement in the office copy of petitioner's letters which reads as under: "There is no information received from GSTN for this shipping bills. Through office interface,IGST amount can be refunded which gets reflected in system as per information from GSTN. Raise issue with GSTN helpdesk" 5. Notwithstanding all these efforts put by petitioner No.1 and notwithstanding the fact that there was no denial of petitioner No.1's entitlement to get the refund of Rs.22,92,587/-, respondents chose to keep quiet. 6. On finding no other option, petitioner approached this Court by way of this petition. On 7/9/2021 following order came to be passed. "1. It appears from the affidavit of service tendered in Court today that the respondent no.6

rsk 5 / 7 919-WP-5160-21.doc (Joint Director, Directorate General of Systems and Management) has received the consignment bearing no. EM737470797IN which, according to Mr. Sarda, learned advocate for the petitioner was dispatched on India Post containing copy of the Writ Petition. 2. The prayer in this Writ Petition is for a direction to the respondents to refund, within a period of four weeks, the Integrated Goods and Service Tax realized from the petitioner in a sum of Rs.22,92,581/- with interest thereon. 3. Our attention has been drawn by Mr. Sarda to a communication dated February 10, 2020 of the Assistant Commissioner of Customs, Drawback Section, JNCH addressed to the respondent no.6.

Appellant / petitioner / assessee submissions

The judgment does not separately label this side’s submissions in an independently extractable passage. No contention is inferred; read the full record.

Revenue / respondent submissions

The judgment does not separately label the respondent’s submissions in an independently extractable passage. No contention is inferred; read the full record.

Court / Tribunal analysis and reasoning

In our view therefore respondents had enough time to file a reply. Respondent No.6 also had sufficient time to take appropriate decision on the communication from respondent No.4 and place the same on record. As no reply has been filed, none of the avernments of the petition has been controverted. The directions of this court also has not been complied with. Moreover, even the communication dated 10/2/2020 from respondent No.4 to respondent No.6 indicates that petitioner No.1 is entitled to refund but petitioner No.1 is made to run from pillar to post only because data of IGST refund is not transmitted from GSTN to ICEGATE. That cannot be petitioner's problem and it was the responsibility of respondents and in particular respondent no.6 to ensure that petitioner No.1 got its refund.

Operative decision and relief

rsk 7 / 7 919-WP-5160-21.doc respondent No.6 never attempted to resolve the problem of petitioner and no reply has been filed and directions of this court have not been complied with. In the circumstance petition is allowed in terms of prayer clause (a) which reads thus:- "a) that this Hon'ble Court be pleased to issue a Writ of Mandamus or any other order or Writ of direction in the nature of Mandamus or any other order or Writ or direction directing the Respondents or such of them as this Hon'ble Court deems fit to refund within a period of four weeks the Integrated Goods and Service Tax of Rs.22,92,587/- (Rupees Twenty Two Lakh Ninety Two Thousand Five Hundred and Eighty-Seven Only) with interest thereon at the statutory rate of interest in accordance with the provisions of section 54 of the Central Goods and Services Tax Act, 2017 r/w section 16 of the Integrated Goods and Services Tax Act, 2017, irrespective of whether the relevant data has been transmitted from GSTN to ICEGATE." 9. Respondent No.1 shall, within 4 weeks ensure that the refund of Rs.22,92,587/- is paid to petitioner No.1 together with interest thereon @ 9% p.a. from the filing date of the petition i.e., 28/4/2021 together with costs in the sum of Rs.25,000/-. 10. All to act on copy of the order authenticated by the Associate of this Court. Respondents shall not insist on certified copy for complying with the order contained in paragraph 9 above. (AMIT B. BORKAR, J) (K. R. SHRIRAM, J.)

Ratio and legal principle

The narrow proposition associated with SRC Chemicals Private Limited & Anr. v. Central Board of Indirect Taxes and Customs & Ors. concerns refund of igst paid on exported goods allowed – technical reason cited by the customs authorities i.e. non-transmission of data relating to export from gstn to icegate not a valid ground to withhold refund lawfully due to an assessee – costs of rs. 25,000/- imposed on cbic. this case underscores the fallibility of digitisation and technology in tax processes and how a taxpayer, who has no control over how the technological system deployed by the govt. functions, is made to suffer in case of a glitch. the petitioner made certain exports on 28th june 2017, on which date the cgst act and the igst were not in force. however, due to reasons beyond the control of the petitioner, the shipping bill did not get printed immediately but got printed on 1st july 2017 on which date gst had come into force. since gst had come into force on this date, the shipping bill got printed with the gst… The proposition cannot be separated from the judgment’s facts, the governing statutory version, the forum’s jurisdiction, and the exact relief recorded in WRIT PETITION NO.5160 OF 2021.

For working-paper purposes, the decision should be cited only after matching the material facts and reading the passages under the judgment-grounded record above. The editorial outcome label “Allowed” is a navigation aid; it does not replace the operative order or explain every issue in a multi-issue case.

Why this judgment matters

This decision is relevant when a file raises the same central question identified in the source headnote: Refund of IGST paid on exported goods allowed – Technical reason cited by the Customs Authorities i.e. non-transmission of data relating to export from GSTN to ICEGATE not a valid ground to withhold refund lawfully due to an assessee – Costs of Rs. 25,000/- imposed on CBIC. This case underscores the fallibility of digitisation and technology in tax processes and how a taxpayer, who has no control over how the technological system deployed by the Govt. functions, is made to suffer in case of a glitch. The Petitioner made certain exports on 28th June 2017, on which date the CGST Act and the IGST were not in force. However, due to reasons beyond the control of the Petitioner, the Shipping Bill did not get printed immediately but got printed on 1st July 2017 on which date GST had come into force. Since GST had come into force on this date, the Shipping Bill got printed with the GST… Its practical value lies in the way the Bombay High Court connected the governing provisions—54 of CGST Act and 16 of IGST Act—to the procedural posture and evidence before it.

The authority level is High Court. That affects persuasive or binding weight, but authority level alone is never enough. Territorial jurisdiction, statutory period, the identity of the challenged order, and later appellate treatment must all be checked before the case is used in advice, a submission, or litigation strategy.

Practitioner action points

• Begin with the complete judgment and mark the paragraphs supporting the exact proposition relied upon.
• Match the statutory version of 54 of CGST Act and 16 of IGST Act and the decision date 2021-10-12; do not assume the current text is identical.
• Compare the notice, assessment, appeal or other procedural sequence with the chronology recorded in this case.
• Verify the stated later-history status and any review, appeal, SLP, curative or rectification proceedings before citation.
• Record why the client’s evidence is materially similar, and also record any fact capable of distinguishing the result.

Does this case match your facts?

Detailed reliance and distinction analysis

Identity check. Confirm that the cited cause title is SRC Chemicals Private Limited & Anr. v. Central Board of Indirect Taxes and Customs & Ors., the proceeding is WRIT PETITION NO.5160 OF 2021, and the decision is dated 2021-10-12. These fields are taken from the judgment record and should appear exactly in the citation note.

Bench check. The judgment identifies the coram as K. R. SHRIRAM & AMIT B. BORKAR, JJ.. A later order by another bench, a larger bench, or a higher forum may alter the weight or interpretation of the proposition.

Provision check. The source associates the dispute with 54 of CGST Act and 16 of IGST Act. The practitioner should place the historical statutory text next to the current text and identify every amendment, proviso, explanation, rule or notification that could change the analysis.

Fact check. The source issue is not a free-standing abstract rule. It arises from the concrete record summarized above. A reliable application note should list the common facts, the different facts, and whether each difference affects jurisdiction, admissibility, limitation, burden, computation or relief.

Remedy check. The recorded result is Allowed. Where a matter is remanded, set aside, partly allowed, or disposed with directions, the exact operative language is more important than a binary winner/loser label.

History check. The current closure state is REVIEW_APPEAL_SLP_CHECK_PENDING. If that state is pending, the page does not assert that no later case exists. It means the check remains open and must be completed at the point of professional reliance.

Section / provision impact

• 54 of CGST Act and 16 of IGST Act — apply the exact version considered in the judgment.

Case network

• Skytech Rolling Mill Pvt. Ltd. v. Joint Commissioner of State Tax (Nodal) — Bombay High Court · Allowed
• Hasmukh Estates Pvt. Ltd. v. ACIT — Bombay High Court · Allowed
• Adityaraj Builders v. State of Maharashtra — Bombay High Court · Quashed / set aside
• Rajesh R. Hemrajani v. ITAT — Bombay High Court · Partly allowed

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