The court affirmed that tax notifications could be unconstitutional, granting relief in the form of IGST refunds and dictating the payment of interest for delays.

JUDGMENT

Rajiv Shakdher, J. (Oral)--In this writ petition, the following reliefs have been claimed by the petitioners:

"a) Declare that Paragraph 11(d) read with 12A(a)(ii) of the Notes and Conditions of the Notification No. 131/2016-Cus. (N.T.), dated 31.10.2016 (Annexure P-2) [as amended by Notification No. 59/2017-Cus. (NT) dated 29.06.2017 (Annexure P-3) and Notification No. 73/2017-Cus. (NT) dated 26.07.2017 (Annexure P-4)] are (i) ultra vires Section 16 of the IGST Act, 2017 read with Section 54 of CGST Act, 2017 and Rule 96 of CGST Rules, 2017, & (ii) unconstitutional and violative of Article 14, 19 and 21 of the Constitution of India & Quash the same;

b) Declare that Circular No. 37/2018-CUSTOMS dated 09.10.2018 (Annexure P-7) is (i) ultra vires Section 16 of the IGST Act, 2017 read with Section 54 of CGST Act, 2017 and Rule 96 of CGST Rules, 2017, and (ii) unconstitutional and violative of Article 14, 19 and 21 of the Constitution of India & Quash the same;

c) As a consequence of the above, Direct Respondent Authorities to grant refund of IGST paid on goods exported by the Petitioners during the Transitional Period".

2. Upon notice being issued, a counter-affidavit has been filed by respondent no.2 (i.e. the contesting respondent) followed by a rejoinder by the petitioners.

3. The record shows that on 26.11.2019, a detailed order was passed by the Court. Via the order dated 26.11.2019, in effect, the Court agreed with the submission of the petitioners, subject to respondent no.2 verifying as to whether duty drawback/CENVAT credit had been availed of by the petitioners, with regard to Central Excise and Service Tax component.

3.1. It is in this background, that thereafter the matter got adjourned on various dates to enable respondent no.2 to verify this fact.

4. The record shows that a compliance-affidavit was filed on behalf of respondent no.2 on 25.02.2021. Thereafter, the matter was taken up on 05.03.2021 when a fresh direction was issued as there was still, not enough clarity, with regard to the core issue, which was, as to whether or not the petitioners had availed of the duty drawback/CENVAT credit with regard to Central Excise and Service Tax component. Accordingly, respondent no.2 vide order dated 05.03.2021 was directed to file an additional affidavit in terms of paragraph 18 of the order dated 26.11.2019. Paragraph 18 of the aforementioned is extracted hereunder:

"18. In case the petitioners would not have availed the benefit of duty drawback/CENVAT credit of Central Excise and Service Tax component, necessary directions would be issued".

5. The matter was thereafter taken up by the Court on 15.03.2021 when Mr. Harpreet Singh, learned counsel appearing for respondent no.2, informed the Court that he had received an e-mail dated 11.03.2021 from the concerned officer, which was indicative of the fact that the duty drawback qua the Central Excise had not been availed by the petitioners. Thus, the only other aspect which respondent no.2 was required to examine, was, as to whether the petitioners had availed the duty drawback qua the Service Tax component.

6. It is in this background that the matter was posted for hearing today i.e. 26.03.2021.

7. Given the directions issued on 15.03.2021, respondent no.2 has filed an affidavit dated 24.03.2021. In paragraph 4 of the affidavit, the affiant has stated the following:

"4. That, accordingly, as per the verification caused by the office of the deponent and the information received from Additional Director General of Systems & Data