The respondents are directed to sanction and pay the refund after first reversing the entries of utilization of the subject credit and debiting the said amount from the credit ledger consequently available to the writ-applicant.
Section 54 of the CGST Act, 2017— Refund —–The applicant prayed for quashing Notification no.26/2017-Custom, dated 29.06.2017 to the extent amending Notification no.16/2015Customs, dated 01.04.2015; for quashing Trade Notice 11/2018, dated 30.06.2017 to the extent it is stated therein under Chapter 5 that importers would need to pay IGST; and for granting refund of Rs. 4,47,43,681/-. The respondents and applicant admitted that the issue raised in this application is covered by the judgment of this Court in the case of M/s. Prince Spintex Pvt. Ltd. Vs. UOI; decided on 03/02/2020, wherein it has been held that the amendment of Notification No.16/2015-Cus. would also apply to imports made during the period 1.7.2017 to 13.10.2017. Trade Notice 11/2018 dated 30.6.2017 was quashed and held that the petitioner is entitled to refund of the amount of Rs. 2,38,83,203/ paid by it towards IGST with interest. The court observed that after filing of writ, Section 49 was amended and new Section 49A and Section 49B were inserted in the said Act. Further, Rule 88A was inserted w.e.f. 29/03/2019 vide Notification No.16/2019 CT, dated 29/03/2019. Thus, w.e.f. 01/02/2019, the ITC available on account of IGST has to be first utilized for the payment of IGST or CGST or SGST. Therefore, the accumulated ITC of IGST of Rs. 4,47,43,682/- started getting utilized automatically during the pendency of the petition. The applicants have Nil balance of IGST in its electronic credit ledger and the IGST balance is converted into CGST and SGST.
Held that:- The Hon’ble High Court allowed writ-application. Further, directed the respondents to sanction and pay the refund of Rs. 4,47,43,681/after first reversing the entries of utilization of the subject credit and debiting the said amount from the credit ledger consequently available to the writ-applicant.