Facts of the Case:

In this case, the petitioner-company exported rice (pre-packaged and labelled), attracting Integrated GST (IGST) at 5%, during the period from 08.05.2023 to 17.07.2023 and paid IGST amounting to ₹1,63,70,582 on such exports. On 15.12.2023, it filed a refund application seeking refund of the IGST paid and, alternatively, requested amendment of the shipping bills under Section 149 of the Customs Act, 1962 to reflect payment of IGST instead of exports under a Letter of Undertaking (LUT). The Customs Department issued a show cause notice and, by order dated 22.02.2024, rejected the application solely on the ground that amendment of the shipping bills under Section 149 could not be permitted since the invoices were amended from LUT to IGST-paid after export and no contemporaneous documentary evidence existed at the time of clearance. 

Aggrieved by the rejection, the petitioner approached the Gujarat High Court, contending that the authorities had failed to consider its independent claim for refund under Rule 96 of the CGST Rules.

Issue:

Whether the Customs authorities can reject an IGST refund claim on exported goods solely on the basis of refusal to permit amendment of shipping bills under Section 149 of the Customs Act, without examining the refund entitlement under Rule 96 of the CGST Rules, 2017.

Held That:

The Gujarat High Court held that the Customs authorities had failed to examine the petitioner’s primary claim for refund under Rule 96 of the CGST Rules, having confined their consideration only to the request for amendment of shipping bills under Section 149 of the Customs Act. The Court observed that the petitioner had made two distinct prayers in the refund application, one seeking refund of IGST paid on exports and the other, only in the alternative, seeking amendment of the shipping bills if such amendment was considered necessary for granting the refund. However, the adjudicating authority rejected the application solely by relying on Section 149 without deciding the principal refund claim.

The Court further noted that there was no dispute regarding the actual export of goods by the petitioner, the export invoices were available on record, and the exported goods were taxable at 5% IGST under Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017. The omission to mention payment of IGST in the shipping bills was found to be an inadvertent error.

Referring to Rule 96(4) of the CGST Rules, the Court observed that refund of IGST paid on exports can be withheld only in the limited circumstances specifically enumerated therein. Since the respondents did not contend that the petitioner’s case fell within any of those statutory exceptions, there was no justification for withholding the refund.

Without expressing any final opinion on the issue of amendment under Section 149 of the Customs Act, the Court directed the Customs authorities to process the petitioner’s IGST refund claim strictly under Rule 96 of the CGST Rules, considering that the statutory conditions for refusal of refund were admittedly absent. The Court also relied upon its earlier decisions in Amit Cotton Industries v. Principal Commissioner of Customs and Ruhi Siraj Makda v. Union of India, which had clarified the legal position regarding grant of export refunds despite procedural lapses. The respondents were directed to pass the necessary orders before the next date of hearing, subject to any further orders of the Court.

Case Name: Agriex v. Union of India dated 02.07.2026

To read the complete judgement 2026 Taxo.online 1866