Department cannot take Coercive Action unless a SCN is issued w.r.t Claim of IGST Refund on Exports under the Advance Authorization Scheme

Last updated: 20 June 2024

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Quick Summary

The Rajasthan High Court has ruled that tax authorities cannot take coercive action to recover IGST refunds related to exports under the Advance Authorisation Scheme without first issuing a Show Cause Notice (SCN). The court's decision came as the validity of Rule 96(10) of the CGST Rules, which governs such refunds, is being challenged. The petitioner argued that the revenue department was attempting to recover funds without following proper legal procedure. The court has adjourned the case for further consideration of the challenge to Rule 96(10).

Court :
Rajasthan High Court

Brief :
The Hon'ble Rajasthan High Court in Reliance Chemotax Industries Ltd. v. Union of India [Civil Writ Petition No. 6961 of 2023 dated May 13, 2024] has directed the Revenue not to take coercive measures against the Petitioner w.r.t Recovery pertaining to the wrong claim of IGST Refund as the vires of Rule 96(10) have been challenged by the Petitioner and due statutory process viz. issue of Show Cause Notice ("SCN") was not followed by the Revenue.

Citation :
Civil Writ Petition No. 6961 of 2023 dated May 13, 2024

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