Refund will be allowed to SEZ units on furnishing a bond or undertaking that if supplier claims the refund, then it would be recoverable from SEZ unit along with interest.

Case Details:

Issue- In the above case, the petitioner has challenged the impugned refund rejection order passed by respondent authority. Petitioner is a SEZ unit where some of the purchases were made from the suppliers located in Domestic Tariff Area on payment of GST. Application was filed for refund of unutilized ITC but respondent authority rejected the claim stating that only Suppliers to SEZ units can make application for refund and not SEZ units.

Held- As per decision made in the case of M/s. IPCA Laboratories versus Commissioner in Special Civil Application No.638 of 2021 which covers this issue squarely with a specific undertaking having been tendered along with the application for the refund that the supplier has not claimed any refund and any eventuality of the supplier having been given the refund, the petitioner is taking the responsibility to make good the amount which may have been given will need to be borne in mind and accordingly, this petition is allowed, quashing the order passed by the Commissioner (Appeals) for the period of September, 2018 to December, 2019 and Assistant Commissioner for the period of 2020 to November, 2021 that the respondent grant the refund of ITC to the petitioner after proper verification and by obtaining a specific undertaking / bond from the petitioner where by stating that if the supplier at any point of time has taken refund and it comes to the notice of the department, then department will be in a position to recover it with interest. Accordingly, it is directed that department shall refund the amount to the petitioner within eight (08) weeks from the date of receipt of copy of the order.