The court emphasized the need for timely refund processing under GST laws, overturning unjust rejection based on procedural grounds.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr. Uchit N. Sheth for the petitioner and learned Assistant Government Pleader Ms. Shrunjal Shah for the respondents.

2. Having regard to the controversy involved in this petition, which is in a narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing.

3. Rule returnable forthwith. Learned Assistant Government Pleader Ms. Shrunjal T.Shah waives service of notice of rule on behalf of the respondents.

4. By this petition under Article 226 of the Constitution of India , the petitioner has prayed for the following reliefs:

“A. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith grant refund of the amount of IGST paid by the Petitioner pursuant to Entry No. 10 of Notification No.10/2017-IGST (Rate) dated 28.6.2017 along with appropriate interest on such refund; Annexure ‘A’

B. This Hon'ble Court may be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ or order quashing and setting aside orders (annexed at Annexure G) rejecting refund of IGST paid on the basis of the impugned Entry No. 10 of Notification No.10/2017-IGST (Rate) dated 28.6.2017; Annexure’A’

C. Without prejudice to the above and in the alternative this Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to allow rectification of returns filed by the Petitioners so as revive input tax credit balance under the IGST head with corresponding utilization from CGST and SGST head;

D. Pending notice, admission and final hearing of this petition, this Hon'ble Court may be pleased to direct the Respondents to grant refund of the amount of IGST paid by the Petitioner pursuant to Entry No. 10 of Notification No.10/2017-IGST (Rate) dated 28.6.2017 along with appropriate interest on such refund; at Annex.A E. Ex parte ad interim relief in terms of prayer D may kindly be granted;

F. Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray.”

5. Brief facts of the case are that the petitioner filed applications for refund for the IGST paid on the Ocean Freight from time to time after pronouncement of the judgment by the Hon’ble Supreme Court in case of Union of India v. Mohit Minerals Pvt. Ltd. decided on 19.05.2022 in Civil Appeal No.1390 of 2022 and allied matters along with necessary documents including Chartered Accountant Certificate regarding non-passing of tax burden. The petitioner also filed separate applications in the month of March and April,2025.

6. The respondent authorities issued the show cause notice upon the petitioner in the month of May, 2025 proposing to reject the refund application on the following grounds:

i) Such applications are time barred.

ii) IGST credit has already been utilised by the petitioner.

iii) The refund claim did not fall within the categories stipulated under section 54(3) of the CGST Act .

7. The petitioner filed a detail reply to the show cause notice explaining that the refund was based on the notification having been declared unconstitutional by the Hon’ble Supreme Court and therefore, limitation under section 54 of the GST Act would not apply. The petitioner also contended that the credit was utilised in accordance with the order of utilisation as stipulated under section 49(5) of the GST Act read with Rule 88A of the GST Rules and there was sufficient balance available