Exporters should not be penalized for inadvertent errors made due to unclear regulations during the transition to GST; claims for IGST refunds should be processed if verified as valid.

JUDGMENT

Navin Chawla, J. (Oral)--The petition has been heard by way of video conferencing.

1. The present petition has been filed by the petitioners praying for the following reliefs:

"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-3) [as amended by Notification No.59/2017-Cus. (NT) dated 29.06.2017 (Annexure P4) and Notification No.73/2017-Cus. (NT) 26.07.2017 (Annexure P- 5)] 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-9) 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) Direct Respondent Authorities to grand refund of IGST paid on goods exported by the Petitioners during the Transitional Period, with 6% interest from the date of the shipping bill till the date of actual refund."

2. It is the case of the petitioners that the petitioners are the exporters of invertors, transformers and allied products. In the course of their business, between 01.07.2017 to 30.09.2007 (which is the transitional period between the pre and post GST Regime), they had made various exports falling under Tariff Item 8504 of the Notification No. 13/2016-Cus.(N.T.), dated 31.10.2016 (as amended by Notification No. 41/2017-Cus.(N.T.) dated 26.04.2017) (hereinafter referred to as `Drawback Schedule') on the payment of Integrated Goods of Services Tax (IGST). The Drawback Schedule prescribed identical rates of Duty Drawback under Column `A' as well as Column `B' for the said Tariff Order.

3. Since there were no guidelines from the GST or Customs department in respect of procedure to be followed in such cases, the petitioners had claimed drawback under Column `A' instead of under Column `B'.

4. By the Circular No. 37/2018-Customs dated 09.10.2018, the respondents have denied the refund of IGST on the ground that the exporters having filed the declarations voluntarily, they are deemed to have consciously relinquished their IGST/ITS claims.

5. The learned counsel for the petitioners states that the issue raised in the present petition is squarely covered by the judgment dated 26.11.2019 of this Court in TMA International Pvt. Ltd. & Ors.. vs. Union of India & Anr. in WP(C) No.2694/2019, wherein this Court in similar circumstance has held as under:

"14. Though, the challenge in the present petition is also to the vires of the circulars enumerated above, however, Petitioners are primarily concerned with the refund of IGST paid on goods exported to them during the transitional period. The Respondents' concerned is well founded that the Petitioners should not take undue advantage of the drawback scheme. The purpose behind impugned circular is to ensure that the exporters do not claim AIRs of duty drawback and simultaneously avail tax neutralization under GST as this would amount to exporter availing double benefits of neutralizing of taxes. However, the fact remains that at no point of time, the petitioners declared that they would forego the claim of IGST refund. During the transitional period, Petitioners have inadvertently claimed benefit und