SANCE LABORATORIES PVT. LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) These writ petitions are filed challenging the validity of Rule 96(10) of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the 'CGST Rules') primarily on the ground that the Rule is ultra vires the provisions of Sec. 16 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the 'IGST Act'). It is not necessary for the purposes of disposal of these writ petitions to refer to the facts of individual cases except where it may be necessary to show how the working of the Rule has affected an individual exporter. Therefore, this judgment does not attempt to analyse the individual facts of each case, and it will be confined to the examination of the question as to whether Rule 96(10) of the CGST Rules as it presently stands is legally sustainable or is liable to be struck down on the following grounds:

(2.) The petitioners in these cases are exporters who are entitled to claim a refund of taxes paid on input services and input goods or the Integrated Goods and Services Tax (hereinafter referred to as 'the IGST') paid on exports by virtue of the provisions contained in Sec. 16 of the IGST Act. The concept of zero-rated supply in the provisions of Sec. 16 of the IGST Act, 2017, read with the provisions of Sec. 54 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act) indicate that there is to be no export of taxes and on the goods being exported the exporter is entitled to a refund of the IGST paid on the export of goods or to the refund of taxes paid on input goods and input services used in the manufacture of goods or provision of services that are ultimately exported. Sec. 16 of the IGST Act (as it stood till amendment by Act 13 of 2021 (Brought into force w.e.f. 1/10/2023 vide Notification No. 27/2023-C.T., dtd. 31/7/2023)) contemplated two methods to enable the exporter to claim a refund of taxes on input goods and input services used in the manufacture of goods exported or services exported. The two methods were:-

(3.) I have heard Sri. G. Shivadas, the learned Senior Counsel appearing for the petitioner in W.P (C) No.17447/2023 on the instructions of Sri. Shaji Thomas, Sri. K. Srikumar, the learned Senior Counsel, appearing for the petitioners in W.P(C) Nos. 26040/2023 and 25969/2023 on the instructions of Smt. Ammu Charles, Sri. Anil D. Nair, the learned Senior Counsel, appearing for the petitioners in W.P (C) Nos.4389/2024, 6653/2024 and 25134/2024 on the instructions of Smt. Aditya Unnikrishnan, Sri. M. Balagopal, the learned counsel appearing for the petitioner in W.P (C) No.20672/2024, Sri. K.N. Sreekumaran, the learned counsel appearing for the petitioners in W.P (C) Nos.20442/2023 and W.P (C) Nos.22051/2023, Sri. Sherry Samuel Oommen, the learned counsel appearing for the petitioners in W.P (C) Nos.39776/2023, 148/2024, 3065/2024, 3124/2024, 3250/2024, 3503/2024, 5412/2024 and 9516/2024, Sri. Sergi Joseph Thomas, the learned counsel appearing for the petitioner in W.P (C) No.41106/2023, Sri. Shameem Ahamed, the learned counsel appearing for the petitioners in W.P (C) Nos.42356/2023, 42395/2023 and 21909/2024, Smt. Krishna K, the learned counsel appearing for the petitioners in W.P (C) Nos.33125/2023, 42313/2023, 42370/2023, 42334/2023, 42717/2023 and 44146/2023, Sri. A Krishnan, the learned counsel appearing for the petitioners in W.P (C) Nos.24230/2022 and 32103/2023 and Sri. Akhil Suresh, the learned counsel appearing for the petitioner in W.P (C) Nos.43142/2023. Sri. P.G. Jayashankar, the learned Senior Standing Counsel for the Central Board of Indirect Taxes & Customs addressed arguments for the Central Revenue. Sri. Mohammed Rafiq, the learned Special Government Pleader (Taxes) appeared for the State.