Case Summary: Vaishnodevi Advisory Pvt. Ltd. v. Dy. Commissioner, CGST & Central Excise, Siliguri Divn. & Ors.

Court: High Court at Calcutta (Circuit Bench at Jalpaiguri)
Petition No.: WPA 2370 of 2023
Date of Judgment: 24.11.2023
Category: Refund of Accumulated ITC – Zero-Rated Supplies
Relevant Provisions:

• CGST Act, 2017: Sections 16, 54, 73, 107, 50

• CGST Rules: Rule 89(4) (turnover of zero-rated supplies)

• Customs Act, 1962: Section 51 (clearance of goods for export)

• GST Circular: Circular 125/44/2019-GST dated 18.11.2019

Facts (with Para References)

The petitioner, an exporter registered under CGST/WBGST Acts, filed a refund claim of ₹29,55,972 for accumulated ITC for Jan–Mar 2021, based on exports made without payment of IGST (paras 2–4). The adjudicating authority sanctioned refund via RFD-06 dated 15.06.2021 after verifying the documents uploaded on the common portal (paras 2 & 12).

Later, the departmental review objected to 15 out of 18 shipping bills on technical grounds:

• 12 bills were countersigned by a Customs Inspector, alleged not to be the “proper officer” under Section 51, Customs Act;

• 3 bills were signed by a Superintendent without approval for consignments above ₹10 lakh as per internal guidelines (paras 3–4).

On these grounds, the Assistant Commissioner filed an appeal under Section 107(2), leading to a partial setting aside of the refund in respect of the 12 Inspector-signed bills (paras 6–7).

The petitioner submitted that the defect was attributable solely to Customs officers; triplicate copies signed by the Superintendent were physically submitted (paras 5 & 8). The petitioner argued that actual export was undisputed, and procedural lapses of Customs could not be grounds to invalidate GST refund (paras 8–10).

Questions / Issues (with Para References)

1. Whether refund of accumulated ITC can be denied merely on the ground that certain shipping bills were signed by an officer alleged not to be the “proper officer” under the Customs Act? (paras 11–12)

2. Whether procedural irregularities attributable to Customs officers can prejudice the exporter when actual export is undisputed? (paras 8–12)

3. Whether the Appellate Authority erred by deciding the matter without verifying authenticity and genuineness of shipping bills directly from Customs authorities? (paras 12–13)

Court’s Observations (with Para References)

The Court noted that:

• The fact of export was never disputed by the department (para 12).

• The objections pertained solely to internal procedural lapses of the Customs Department, not to any act or omission on part of the petitioner (paras 12 & 11).

• The GST officers failed to verify from Customs whether the goods were in fact exported and whether triplicate bills signed by the Superintendent existed (paras 12 & 13).

• The Petitioner had provided both electronically uploaded documents and the physically signed triplicate copies by the Superintendent (paras 8 & 13).

• The CGST Circular 125/44/2019-GST does not mandate verification of officer-level signatures on shipping bills for processing GST refunds (para 10).

• Any procedural irregularity by Customs officers cannot penalise the exporter, because signing or countersigning of bills is completely outside the exporter’s control (paras 8–11).

The Court held that the Appellate Authority wrongly ignored these aspects and acted without proper enquiry (paras 12–13).

Judgment / Verdict (with Para References)

The High Court set aside the order dated 12.12.2022 passed by the Appellate Authority (para 13).

The matter was remanded to the Review Authority (Respondent No. 4) with directions to:

• Conduct a thorough scrutiny of all documents and shipping bills (para 14).

• Obtain confirmation from the Customs Department regarding authenticity of export (para 14).

• Provide the petitioner a reasonable opportunity of hearing (para 14).

• Complete the process within four months (para 14).

• Refrain from any coercive action pending final order (para 14).

The Court clarified that the authority must pass a reasoned and speaking order uninfluenced by prior observations (para 15).

Summary of Cases Referred (Tabular Form)

(The judgment does not cite external judicial precedents; hence, the table covers internal references only.)

Between Fine Lines (Practical Takeaway for Trade)

This judgment confirms that GST refunds cannot be denied on technical or procedural lapses committed by Customs officers, especially when actual export is undisputed. Exporters are not expected to control, supervise, or verify internal administrative procedures of Customs officers. Departments must verify genuineness of export with Customs before rejecting refunds, and cannot penalise taxpayers for irregularities entirely outside their control.

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