Payment of pre-deposit under Section 107(6)(b) of the CGST Act can be made using the Electronic Credit Ledger, validating the petitioner’s compliance.

JUDGMENT :

Bhargav D. Karia, J.

1. Heard learned advocate Mr. Abhishek Rastogi for learned advocate Mr. Bhavesh Chokshi for the petitioner and learned advocate Mr. Utkarsh Sharma for the respondents.

2. By way of this petition under Article 226 of the Constitution of India, the writ applicant has approached this Court with the following reliefs:

“a. issue an appropriate writ of mandamus or any other writ, order or direction quashing and setting aside the impugned Letter dated 25.04.2023 (Annexure B) insofar as it has been issued arbitrarily and in violation of Article 14 of the Constitution;

b. direct respondents to consider the amount of INR 3,36,82,000/- paid by the petitioner company, towards the mandate of pre-deposit, vide Form GST DRC 03 dated 09.02.2021 and 26.12.2022 is sufficient compliance of section 107(6)(b) of the CGST Act and corresponding provisions of the IGST Act;

c. pending final hearing and disposal of this petition, restraint the respondents from passing any final orders in relation to appeal No. 11/GST/CP/22-23 dated 28.12.2022, preferred by the petitioner company before Commissioner (Appeals) CGST & Central Excise Appeals Commissionerate, Surat;

d. alternatively, direct respondents to refund INR 3,36,82,000/- paid vide Form GST DRC-03 dated 09.02.2021 and 26.12.2022 (Annexure A);

e. grant ex parte ad interim relief in terms of prayer clauses (c); and

f. grant any other and further relief which this Hon’ble Court may deem fit and proper in the facts of the present case.”

3. The brief facts leading to filing of the present petition can be stated as under:

3.1 The petitioner is public limited company engaged in the business of manufacturing and exporting specialized chemicals such as aroma chemicals, food antioxidants, rubber chemicals and lubricant additives. A substantial portion of the petitioner’s products is also exported resulting in significant contribution to the foreign exchange earnings of the country.

3.2 During 28.02.2018 to 14.01.2021, the petitioner company was availing refund of IGST paid on exports in terms of section 16(3)(b) of the Integrated Goods and Services Tax Act,2017 [‘IGST’ Act for short] as it stood prior to its omission by Finance Act,2021 besides the IGST exemption conferred by Notification No. 79/2017-Cus dated 13.10.2017 on import of raw materials incorporated in the manufacture of export/exported goods on the strength of validity issued Advance Authorization Licenses.

3.3 The petitioner company was precluded from availing benefits of rebate in terms of section 16(3)(b) of the IGST Act if imported goods enjoyed exemptions conferred by NN 79/2017 since 09.10.2018 vide introduction of Rule 96(10) of the Central Goods and Services Tax Rules,2017 [‘CGST’ Rules for short] read with Notification No. 54/2018-CT dated 09.10.2018.

3.4 Aggrieved by the arbitrariness of the aforesaid precluding provision and corresponding notifications, the petitioner had preferred a writ petition before the Bombay High Court bearing W.P. (L) No. 8839/2020 which is pending. Parallely, the petitioner was compelled to depart from INR 3 Crore and reverse, “under protest”, the input tax credit equivalent to INR 3 Crore vide Form GST DRC-03.

3.5 Thereafter, the respondent continued to pursue their investigation and as a consequence thereof searches were conducted at the premises of the petitioner-company. Thereafter, after recording the statement of Director of the company and upon completion of the investigation, a show cause notice dated 16.03.2022 was issued demanding the refunded IGST in terms of section 16(3) (b) of the IGST Act along with interest and penalty.

3.6 The petitioner vide detailed reply dated 23.05.2022 and personal hearings dated 19.07.2022 and 10.08.2022 submitted that the matter was revenue neutral, reversal of IGST exemption for the period from October 2019 to September, 2021 had been effectuated in absence of any contravention of Rule 96(10) of CGST Rules. However, the respondents vide order dated 20.0