HC Remands IGST Refund Case Involving Omitted Rule 96(10)

Case Details: Kelvion India (P.) Ltd. vs. Union of India - [2025] 181 taxmann.com 723 (Bombay)

Judiciary and Counsel Details

M.S. Sonak & Advait M. Sethna, JJ.
Rahul Thakar, C. B. Thakar & Yash Dethe, Advs. for the Petitioner.
Karan Adik & Megha Bajoria, Advs. for the Respondent.

Facts of the Case

The petitioner, a manufacturer-exporter, imported raw materials under advance authorisation with exemption from customs duty and IGST and exported finished goods on payment of IGST during June 2019 to December 2019 and July 2020 to September 2020, claiming IGST refunds. The Directorate of Revenue Intelligence (DRI) alleged violation of Rule 96(10) of the CGST Rules due to use of advance authorisation, pursuant to which the petitioner repaid the refunded IGST along with interest. Claiming that excess tax had been paid, the petitioner filed a refund application, which was rejected by the adjudicating authority and the rejection was upheld in appeal, leading to the writ petition.

High Court Held

The High Court held that Rule 96(10) of the CGST Rules had been omitted without any saving clause, as already held in Hikal Ltd. v. Union of India. Since the authorities had proceeded on the basis of an omitted provision and without the benefit of the said decision, the impugned orders could not be sustained. Without examining the merits, the Court set aside the impugned orders and remanded the matter to the adjudicating authority to decide the refund application afresh after considering the legal position, thereby deciding the matter in favour of the assessee by way of remand.