Gujarat High Court
Scarlet Prints Llp vs State Of Gujarat on 26 April, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/SCA/2318/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 2318 of 2018
==========================================================
SCARLET PRINTS LLP
Versus
STATE OF GUJARAT
==========================================================
Appearance:
UCHIT N SHETH(7336) for the PETITIONER(s) No. 1,2
ADVANCE COPY SERVED TO GOVERNMENT PLEADER/PP(99) for the
RESPONDENT(s) No. 1
MR.CHINTAN DAVE, AGP for the RESPONDENT(s) No. 1,2
==========================================================
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 26/04/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Petitioner is a partnership firm and is engaged in the business of manufacturing and selling of printed canvas. The petitioner entered into a contract with one Prints & Signs International LLC, a US based company, under which, the petitioner would manufacture printed canvas and export such goods directly to the customers of Prints & Signs International LLC. In the process of such manufacturing and export activity, the petitioner would be eligible to exemption of certain taxes which would become refundable to the petitioner under the Page 1 of 7 C/SCA/2318/2018 ORDER Gujarat Value Added Tax Act, 2003. However, such refund would be granted subject to proof of the export of the goods. It is this element which has created some difficulties for the petitioner. The case of the petitioner is that some of the exports are made by the petitioner directly and in some cases, such exports are made through recognized courier services. It is this later mode of export which causes difficulty to the petitioner claiming refund.
2. In relation to the exports made by the petitioner in the quarter ending on 31.03.2017, the petitioner had applied for grant of provisional refund of a sum of Rs.4,65,000/. Such application made by the petitioner online came to be rejected by the Deputy Commissioner of value added tax by impugned order dated 11.12.2017 on the ground that the petitioner had made such exports through a courier agency. Though not so stated, the stand of the said authority appears to be that the proof of export was inadequate.
3.The petitioner in addition to challenging the said Page 2 of 7 C/SCA/2318/2018 ORDER order dated 11.12.2017 has also challenged a circular dated 17.02.2007, under which, the Government has made compulsory filing of certain documents for the exporting dealers to claim refund of VAT. These documents are as under:
I. Bill of lading which would have the stamping of "Shipped on Board" or airway bill. II. A copy of bill of shipping III. Copy of export invoice authorized by customs officer IV. If the sales are as per section 5(3) of the CST Act, copy of formH.
4. Case of the petitioner is twofold. Firstly that the part of the exports were directly made by the petitioner and therefore all the documents mentioned above were available and produced before the authorities, despite which, the provisional refund claim came to be rejected. The petitioner's second grievance is that the remaining exports were made through couriers. These couriers do not provide copies of shipping bills since in one common shipping Page 3 of 7 C/SCA/2318/2018 ORDER bill, exports of various customers of such couriers would be included. Merely because the petitioner is unable to produce such document, the authority cannot reject the refund claim as long as the petitioner can demonstrate with certainty, the factum of actual export of goods.
5. The respondents have appeared and filed reply, in which, it is mainly stated that the circular is legal and proper. The authorities in order to verify that actual exports are made, would require certain authenticated documents. Unless such documents are produced, refund cannot be granted. In essence, the stand of the respondents is that in case of exports made through the courier agencies, in absence of full documents of shipping bill etc., it is not possible to ascertain whether the goods actually crossed the custom borders of the country.
6. Insofar as the petitioner's provisional refund claim in connection with the exports directly made is concern, clearly the authorities committed an error in rejecting such claim. This issue does not require any elaborate discussion. Coming to the second Page 4 of 7 C/SCA/2318/2018 ORDER issue, though we share anxiety of the department that the refund of taxes can be granted only after proper proof of the export of the goods, we cannot appreciate the insistence of the department to stick to procedure laid down way back in the year 2007. More than a decade has passed since then. In a fast moving world with new modes of communication, transportation, technology coming up every other day, it is expected that the department finds proper solutions to the new emerging situation. Export of goods even in small quantities by individual manufactures, dealers and traders has become possible and convenient on account of systematic mode of transportation provided by courier agencies. When a courier agency thus, exports goods in a container or a consignment, it would necessarily contain goods of large number of customers. Inability or reluctance of the courier service to share with its customers such as the petitioner full details of shipping bills in such cases would be understandable.
7. Counsel for the petitioner had pointed out that all the courier services are duly registered with the customs authorities. Barring shipping bill, the Page 5 of 7 C/SCA/2318/2018 ORDER petitioner had produced sufficient other evidences of actual export of goods such as the invoice, online order, courier report, delivery status report, remittance, transaction advice and invoice of the courier agency.
8. Under the circumstances, even if we do not expect the department to clear the provisional refund in cases where the documents referred to in said circular dated 17.02.2007 are not produced since the export is made through courier service, such claim cannot be rejected while finally assessing the refund payable to the exporter only on this ground. In other words, as long as there is alternative proof of documentary nature available, the department must consider it, process it and pass suitable order in terms of law in such refund applications.
9. We notice that as per rule 15(7) of the VAT Rules, the refund applications have to be finally processed in three months.
10. Under the circumstances, petition is disposed of with following directions:
Page 6 of 7 C/SCA/2318/2018 ORDER
(I). That, petitioner's refund claim in cases where the exports were made directly, may be decided without any further delay and;
(II). The petitioner's refund claim in relation to exports made through courier services may be considered in light of the observations made here at the time of finally processing the same, which may also be done expeditiously.
11. For such purpose, impugned order dated 11.12.2017 is set aside. Petition is disposed of.
(AKIL KURESHI, J) (B.N. KARIA, J) ANKIT SHAH Page 7 of 7