The court ruled that the tax authority's reliance on non-submitted documents to reject a GST refund claim was improper, requiring reconsideration of evidence validating export service transactions.

ORDER :

1. In this petition, the petitioner seeks for the following reliefs:

“Issue a WRIT OF CERTIORARI and quash the following orders:

a. Order No.ACCT (Audit) 4.5/DGSTO-4/S-74-56/23-24 dated 21.12.2023 by the respondent No.1 (Annexure A)

b. Order No: ZD290325100718D passed in proceedings No.GST.AP.493/2023-24 dated 21.03.2025 by the Respondent No.2 (Annexure B), c. Rectification Order No: ZD290325103133U passed in proceedings No. – GST.AP.493/2023-24 dated 29.03.2025 by the respondent No.2 (Annexure C), d. Rectification Order no.ZD2909251006761 in proceedings No.GST.AP.493/2023-24 dated 25.08.2025 by the Respondent No.2 (Annexure-D)

And remand the matter back to the Respondent No.2 for a fresh consideration in the light of the documents produced at Annexure-J.”

2. Heard the learned counsel for the parties and perused the material on record.

3. A perusal of the material on record would indicate that in the first instance, the respondent No.1 passed an order dated 21.12.2023, which was assailed by the petitioner before the second respondent - appellate authority, which dismissed the appeal vide order dated 21.03.2025. Subsequently, the respondent No.2, suo- moto initiated rectification proceedings and passed an order dated 29.03.2025. Subsequent to which the petitioner filed an application seeking rectification under Section-161 of the KARNATAKA GOODS AND SERVICES TAX ACT 2017 and Central Goods Services Tax Act 2017, which culminated in the impugned rectification order at Annexure-D, dated 25.08.2025. Aggrieved by the aforesaid orders passed by the respondent Nos.1 and 2 the petitioner is before this Court by way of the present petition.

4. The learned counsel for the petitioner would reiterate various contentions urged in the petition and invite my attention to the documents produced by the petitioner including documents relating to foreign inward remittance certificate / bank realization certificate issued by the petitioner, in favour of the petitioner which is produced by the petitioner along with the representation at Annexure-J, dated 14.07.2025.

5. It is submitted that though the petitioner produced the details and the documents to indicate foreign inward remittance made by the petitioner, the second respondent has rejected the rectification application filed by the petitioner without considering the said documents produced along with Annexure-J, dated 14.07.2025 and has erroneously rejected the rectification application by passing the impugned order at Annexures-D dated 25.08.2025, which deserves to be set aside.

6. Per contra, the learned HCGP for the respondents submits that there is no merit in the writ petition and the same is liable to be dismissed and also supports the impugned order and submits that since the petitioner did not produce the requisite documents before respondent No.2, the question of interfering with the impugned order would not arise in the present petition and is liable to be dismissed.

7. As rightly contended by the learned counsel for the petitioner while rejecting the claim of the petitioner for rectification, the second respondent held as under:

“According to guidelines from the Reserve Bank of India (RBI) and letters circulated by FEDAI (Foreign Exchange Dealers Association in India), the following 2 documents can be issued by A.D (Authorized Dealer) Category 1 banks in India as proof of foreign transfers to India.

Physical Foreign Inward Remittance Certificate (FIRC)

A physical FIRC may be issued only for inward remittances covering Foreign Direct Investment (FDI) / Foreign Institutional Investment (FII). Payments for th