Refund Directed Despite Risky Exporter Tag—Proper Officer Must Decide Within 2 Months

Case Title: Majeed Kunnapallil Jabir v. Superintendent, CGST & Central Excise & Others
Court Name: High Court of Kerala at Ernakulam
Petition Number: WP(C) No. 27880 of 2024
Date of Judgement: 07 October 2024
Category of Dispute: Refund under IGST
Relevant Sections:

• Section 54(6) of the CGST Act, 2017

• Rule 96 & 96(5A) of the CGST Rules, 2017

🧾 Facts of the Case

[Para 1] The petitioner, Majeed Kunnapallil Jabir, proprietor of Exotic Wood Masters, filed a refund claim of IGST paid on exports under Section 54 and Rule 96. The refund application—deemed filed via shipping bill dated 14.06.2022—remained unprocessed.
[Para 1] The petitioner was tagged as a “risky exporter,” preventing refund disbursement.
[Para 3] No provisional refund of 90% under Section 54(6) was released, worsening the financial impact.
[Para 2] The department referred to CBIC Instruction No. 04/2022-GST dated 28.11.2022, requiring further verification under Rule 96(5A) in cases of risky exporters.
[Para 4] The petitioner sought removal from the risky exporter list via multiple applications, and provided evidence including business premises photographs.

❓Questions in Consideration

[Para 4]

1. Whether the refund application based on shipping bill dated 14.06.2022 should have been processed within the statutory time.

2. Whether the classification of the petitioner as a risky exporter is valid ground to indefinitely delay refund.

3. Whether the proper officer is duty-bound to decide the refund application within a reasonable time and after hearing the petitioner.

👩‍⚖️ Observations of the Court

[Para 4]

• The shipping bill constitutes a valid refund application under Rule 96.

• Classification as a risky exporter does not indefinitely stall decision-making; the statute and Rule 96(5A) require the proper officer to process after due verification.

• No action had been taken since June 2022 despite multiple representations.

• Even provisional refund under Section 54(6) was not considered.

🏛️ Judgement of the Court

[Para 4]

• The 2nd respondent (Deputy Commissioner of Customs) or competent authority must decide the refund application within two months from the date of receiving a certified copy of the order.

• The petitioner must be granted an opportunity of personal hearing before deciding.

• The competent authority must also decide on the request for removal from the “risky exporter” list, if not already done, without further delay.

✏️ Between Fine Lines

• Refund application based on shipping bill must be acted upon promptly.

• Being tagged as a “risky exporter” cannot be used to delay refunds indefinitely.

• Authorities are required to follow due process with a hearing.

• The High Court ensures statutory rights of exporters are not denied.

• Provisional refund is a right, not a privilege, under Section 54(6).

📚 Summary of Referred Cases