The Allahabad High Court in case of M/S Saru Silver Alloys Pvt Ltd Versus UOI stayed the recovery in the writ petition filed by the exporter challenging Rule 96(10) of CGST Rules which takes away the right of the exporter to claim refund of tax which is a right granted by the substantive provisions of the IGST Act.
The bench of Chief Justice Arun Bhansali and Justice Vikas Budhwar has noted that the provisions of Rule 96 (10) of the CGST Rules, 2017, based on which the order impugned has been passed, has been struck down by the Kerala High Court in M/s. Sance Laboratories Private Limited Vs. Union of India & Ors.. Further submissions have been made that the authority has relied on the judgment of Gujarat High Court in Cosmo Films Ltd. Vs. Union of India & Ors., which judgment has subsequently been reviewed by order dated 19.09.2024.
The petitioner/assessee is an exporter. It imported duty free raw material under Advance authorisation in terms of Notification No.79. It exported final products on payment of IGST. It claimed a refund and it was sanctioned. Recovery was sought to be undertaken alleging violation of Rule 96(10) of the CGST Rules, 2017. Demand was confirmed. The petitioner applied for rectification. The same was rejected relying upon a decision of Gujarat High Court in Cosmo Films. Hence, writ petition came to be filed challenging the legality and constitutional validity of Rule 96(10).
Rule 96(10) of the CGST Rules takes away the right of the exporter to claim refund of tax which is a right granted by the substantive provisions of the IGST Act. A comparison between Rule 89 and Rule 96 of the CGST Rules reveals an unreasonable classification between exporters seeking refunds.
The Court issued notice and granted stay on recovery pursuant to order confirming demand and rectification.
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Case Details
Case Title: M/S Saru Silver Alloys Pvt Ltd Versus UOI
Case No.: Writ Tax No. – 1534 Of 2024
Date: 6.12.2024
Counsel For Petitioner: Bharat Raichandani
Counsel For Respondent: Ankur Agarwal
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