Facts of the Case:

The petitioner sought refund of Integrated Goods and Services Tax (IGST) paid on exported goods. The Customs authorities had not processed the refund on account of errors allegedly committed while filing shipping bills and furnishing GSTR-3B returns. The petitioner relied upon an earlier interim order passed by the Gujarat High Court in Special Civil Application No. 5623 of 2024, wherein, under similar circumstances, the Court had directed processing of the refund. It was specifically contended that the petitioner’s case did not fall within any of the circumstances contemplated under Rule 96(4) of the CGST Rules, 2017, which permits withholding of refund only in limited situations. The respondents did not dispute either the fact of export or the petitioner’s eligibility for refund and merely attributed the non-processing of the claim to procedural errors in the export documentation and returns.

Issue:

Whether refund of IGST paid on export of goods can be withheld merely because of errors in shipping bills or GST returns when the exporter has actually exported the goods and the case does not fall within any of the contingencies specified under Rule 96(4) of the CGST Rules, 2017.

Held That:

The Gujarat High Court observed that Rule 96(4) of the CGST Rules exhaustively prescribes the circumstances in which an IGST refund claim can be withheld. The respondents did not dispute that the petitioner had actually exported the goods nor did they contend that the case fell within any of the conditions enumerated in Rule 96(4). The Court noted that the authorities had focused on rectification issues under Section 149 of the Customs Act but failed to examine the refund claim from the perspective of Rule 96 of the CGST Rules. Relying upon its earlier order in Special Civil Application No. 5623 of 2024 and the judgment in Amit Cotton Industries v. Principal Commissioner of Customs [(2019) 68 GSTR 226 (Guj.)], the Court held that procedural discrepancies in shipping bills cannot by themselves justify withholding a legitimate export refund where actual export of goods is undisputed.

Accordingly, the Court directed the authorities to undertake the necessary exercise and process the refund claim without insisting upon resolution of the rectification issue under Section 149 of the Customs Act. The Court further directed that appropriate orders be passed before the next date of hearing, subject to further directions of the Court.

Case Name: M/s LABH ENTERPRISE THROUGH PARTNER KRUNAL CHHAGANBHAI PATEL v. COMMISSIONER OF CUSTOMS & ORS. dated 04.08.2026

Citation No. 2026 Taxo.online 2285