Order Date – 20 November 2024

Parties: M/S H K ENTERPRISE Vs UNION OF INDIA & ORS.

Facts –

• The Petitioner, M/s H K Enterprise, pursuant to the judgements of Hon’ble Apex Court in the case of Union of India and others Vs. Ms. Mohit Minerals Pvt. Ltd. filed a refund on 29.03.2023 of GST paid on Ocean Freight under Reverse Charge Mechanism on import of goods in India.
• However, on 15.06.2023, the petitioner was issued with the Notice for rejection of refund application vide FORM GST RFD-08 asking to show cause as to why the refund application should not be rejected on the ground of delay.

Issue –

• Whether the petitioner is eligible for refund of IGST on ocean freight paid by them?

Order –

• The Divisional Bench of Hon’ble High Court observed that the issue of levy of IGST on ocean freight is no longer res integra and has decided by the Hon’ble Apex Court in case of Union of India and another Vs. Mohit Minerals Private Limited through Director (Supra) and the decision of various High Courts including this Court in case of BLA Coke Pvt. Ltd Vs. Union of India & Ors. passed in Special Civil Application No. 19481 of 2023, wherein, it has been categorically held that when the Notification itself is struck down, the respondent-authorities cannot insist for levy of IGST on the amount of ocean freight.
• The petitioner could have filed the application for refund only after the Notification in question has finally struck down and appeal of the Union of India dismissed in the year 2022. Therefore, the Court held that the application for refund having been filed within a reasonable time thereafter, cannot be held to be time barred. 
• Hence the writ petition filed by the petitioner seeking refund of the IGST is maintainable and must be allowed as the levy has been held to be unconstitutional. The petition, therefore, succeeds and is accordingly allowed.