The High Court · 2025

Sri Narendra Dave, learned counsel appears for N4/s. Lakshrni Kunrariur & Sridharan. learned counsel tor pctltroncr. Smt. Bokaro Sapna Reddy, learned Senior Standing Counsel hrr lncorne-tax appearij for respondents.

2. In the appeal preferred by the department under Section 107(2) of the Cenh'al Goods & Services Tax Act, 2017 (for short 'CGST Act') against Relund Sanction Order (RFD-06) dated 07.10.2022. passed by respondent No.2/Refund Sanctioning Authority/ori_einal authority Deputy Comrnissioner of Central Tax, Gachibowli Division, Rangareddy Cornmissionerate, the appellate authority vide inrpugned order datcd 29.09.2023 has set aside the said order holding that the Rclund Sanctioning Authority has ened in classifying the service as export of service without examining nature ol'sen,ice. placc of provision of service and without 2 ,r'i ., . , li i; L1\' i,-4,,i:) dxamir)rrc the applicability of sub-sectious (3 ) to ( 13) ()l Section l3 .r1' lntegrated Coods & Services Tax Ait, 1017 (ior short 'lGSf Act'). Therelbre. supply does not qualify it5 export arrd retirnd is emorleous. The pctitioner being aggrieved theleto Iras pret'erred the instant Writ Petition l. Lcirrrred counsel for the petitionel has drrrvn thc atteution cl this Court to thc RclLrnd Sanctiorr Older anrl sLrbmittcd t hat sanction of the relirnd rvas nrlde aft,:r satisfying that the pc itioner lras made zero rated supply of ;ervices and as per thr ,\djusted Total Turnover calculated in trrms of Rule 89(4t ol tle Central Goods & Selvices Tax Rules.20l7 (tbr short '('GST Rules'), the net input tax credit uould bc Rs.1.43.()7.8211/- for which reflnd rvas sou-qllt. Thc Refund Sanctionins Authority found that the clairn was n ithin tlrc liinitation period. The petitioner had filed all the due returns and thcre ,vere no dues pending fbr recovely trorn ther-n. T'he 2 provisions of unjust enrichrnent in terms of Section 54(8) ol' Central G,rods & Services Tax Act. 20i7 (firr short 'CGST Act'.1 r,,,-'rc not applicable to the relund applicaiion. The refLrnd 3 IICJ (AIGS. J) & GMM, J w P No 3516 ol202,1 amnul.rt clairned r,vas lbund debited lrorn the electronic credit ledger. Thc,v have not claimcd the rel'und of ITC on invoices u,hicli are not re-tlectc-d in FORM GSTR-2A rnd the refund is not barred undcl thc pror i'iorts 11[ ]"'l x1111 -l''l provisos to Section 54(3; of CGST Act inasmuch as the goods exported are not subjected to export duty and the supplier of goods or services or both has not ar,ailed thc central tax or claimed refund of the integlatcd l-ax paid on such supplics. He thereby sanctioned rclund of Rs. I,4i.97,8-l l/- in cash to the petitioner in terms of Section .54(8) ol CGST Act and 92(l) of CCST Rules. It is subn-ritted that pursLlant to the said order, the departmental appeal was filed on two grounds. "lVhether the order of the Rclund Sanctioning Atrthorit.r' in sanctioning re(und of Rs.I,43,97,8,1ll- l. \\'ithout proper determination of "'furrrovcr ol Zero Rated Supply of scrvices" as stipulated in Rule 89(:lXD) of Central ()oods and Services Tax Rules, 2017 and "Adjusted Total Turnover" as stipulated in Rutc 89(4XI1) of Central Ooods nnd Services'fax Rules,2017; and I i 4 l i; L, ,.i. \Yithout proper lerification of agreerncnts to asccrtain the nature of serrices ancl Place of provision of strriee as to ryhether the), constitutc "erpr)rt of services" as per Section 2(6) ol' the lntcgrated Goods & Services 'Iax r\ct, 20t7 . is legal and proper?" I-c-ru'r'c-tl counscl fbr the petitioner has dlau,n thc attenti()n o this Court to the discussions and f irrdinqs tiorn paras l5 tr, 23 of the impugrled order. It is subrrrittcd that a perrrsal rrf the observations at paru ll of the intpugned order \\ ould illo.\ that thc contention of respolldent No.2/appellant that iurr lrtl lbreign rernittance during the rele\,an. period werc nil. anrl ht nce. the total zero rated supply of scl'r'iccs {irr thc claim p,-'ri rd rvas 'NIL' and Adjusted total tul'n()\,er was also 'NI[-', ,,i'a; rrot sustainable and liable for rejcction. as per the appr:llute iurthority. The appellate authority also lound that the content iorL of respondent No.2 that the Refrlnrl Sauctiou ing Authonty had concluded that the place of provision of service is outsidc India and the supply of service is export, without I I 5 IICJ IAI(rS, J) & GMM, J rv P Nd 3516 of 2024 exarnining the nature cll service, phce of provision of service and without exarnining the applicability ol'sub-sections (3) to ( 13 ) of Section 13 of IGS f Act. was also not correct. He also took note that the petitioner had subrnitted agreeurent copy, its incorporation certilicate as u,ell as service rccipient. The petitioner had also subn.ritted the naure change certificates of both the companies. It was further obscrved frorn the service agrcclnen[ that the petitioner desired t() obtain infrrrniation technology services to support their br,rs iness operatiolrs and have necessary resources to provide such services. They have also submitted additionat documents about the selviccs provided. However, in a cryptic manner, the appellate autholity has concluded that the invoices and agreement show that the petitioner is working as intelmediiiry, an agent of the service recipient. No scrutiny or analysis of the documents submitted has been made by the apltcllate authority to alrir e at the atbresaid conclusion that the petitioner is providing \ intermediary services in terms of Section 2(13) of IGST Act Hence, the place of provision of service is India i.e., krcation of scrvice provider in terms ot'Section 13(8Xb) of IGST Act 6 The appella e authority contnritted a serious ertrr in scttinq asicle the- R.fund Sanction Order by holding that the Refirnd Sanctionirrg Authoritl' has erlctl in classifying thr' sclvie.- as export oi s,:r'r.ice rvithout exanrining the nature cf service. plrrce ol pr ovision ol service and without exarnininc the applicabilitl ol sub-sections (3) to (13)of Section 13 of IGST ,\c:1. It is 'u rmitted that the appellate authority does not havc thc pon,cr tr, r'ernand. The appcllate authority thercfore. ought to liave an'ir ed at indcpendent findings alter subn-ri;sion of all relcr,atrt dr ,cuments admittedly whether thc petitioner's scrvices did qualify as zero rated supply of services tor export Instead trl tloinq that. by a cryptic non-reasoned order. the appellate au.hority has strai_qht away held that the petitioncr is ri'orking as ntermediary. an agent of the service recipient. By rloins str. tl c Refund Sanction Order passed b1, the original autholitl has been sr:t asidc without any application ol mind Therefolr-'. the petitioner has prefened the plesent Writ Petition. t ! a-------., --- t 7 '1. 'ilrc responclcnts lrave filcd a counter-al fldavit opposing tlte prar cr. 5 [.caruecl coLrnscl lbr thc lcsporrdcnls sLrbrnits that tlre clainr o1'rr'tirucl lclates to thc taxt.s ltaid r-urdc'r' the catcgorv ol' "l-.xpclrt o{' qoodsiscrvices u ithoul pa),rncllt of' tax {eccurnulated I I(')" lbr thc period liorn 0l . 10.202 I to I I 0l l0ll lirr an :rrlour.rt o1- I{s.i,:11.97.E,1 l/- in telnrs ol'thc l" provisn to Section 54(3Xi) ol CCiSI- Ac1. It is subrnittcd that thc clepartrnental appeal \e'as prc{brred alicr thc revieu, ot'tlcr \\ its passed, at thc instancc ol ll'rc .lurisdictional l )cptrtr,/A ssistant Corntrissiouc-r un<ler Scction 107(2) ol' ('GST r\c1, betbrc the Additional/.loint (lorln.rissioncr (,\ppeals-t), (lustoms & Central 'l'ax, I'i1'dcrabacl Zone, on thc alirrcstatccl gr:ouncls. It is submitted that tl-rc coutenlions o1'thc petitioncr that thcl, lLrlllll thc criteria laid dclwn in (iS'l- statute lnd tlrcir supplics do not fall uuder sub-sections (3) to (l3) ol' Scction l3 ol' IGST Acl 'fhe decision of the appellate authority that the nature and the place o1'supply of scrvices and tlrc supplics are not exports arc incorrcct. It is turthcr B subrritted th rt thc irnpugned ordcr is ivell q,illrin tlre jurisdiction oi' the appellate autholitl' as hc passcd thc sarre basecl on tlrc tlrolouslr cxaminatiou o1' all aspects o{' the CIISC irrcluding cll:sillcation ol se'rlices to dctcrnrinc tlre clisibilitr ol'tlrc relirntl cllinr. 'l he inrpuurred ordcr has heen ;rasscd :rlicr' tlrorotrqh .'rrrnrirration ol' thc f-acts, clocuments and legal provisions rrrr,"l is not based on incorrcct l-acts, assunrptions of prcsr.rnrl)ti\)n: rrs allcgccl by tlre petitiouer. -[-lrc scopc of SCI'VlCCS plor idctl bv the l.rctitioncr indic:rtcs thr: pctitioncr's rolc as irtc'nrcclian, under Sectiun 2( l3) o1' IGS'l Act. Thercfbre, tlr:ir services qualill AS inte rrnedian :;crr,'iccs. l he I petitiorrcr t'ncilitates or arrarlges supplies betu,cen tlte'm and other partics Lc'arrrc.l counscl for thc rcspondents subn.rits tliat thc petitioner sh.rrrkl have availcd tl'rc rentedy of appeal belilre (lSl -['ribrrrrrl rrndcl Section ll2 of ('GS'l- Act ir.rstead of approachirrt this Court undcr ulit.jurisdiction rvhere lssues or l-acts arc sorrrght to bc raisecl 9

6. \\i'c have accorded corrsidcration to tlrc subrnissions o1' the learned counsel fbr the paflies. We havc rcltrrcd to thc relevant uraterial lircts alrove. Wc have also pcruscrl the orcle-r ol'thc ftclirnd Sanctionins Authority, and the inrpLruncd order |asscd b1' the appcllatc aLrthoritr'. 'Ihc discussion and lindings renclcred b1 tlrc appe llate authoritv in thc inrpueued ordcr lionr pararraphs l5 to ll are cluoted hcreunder: "l-5. I harc' gortc tlilougli rccords of the casc. closs objections :rnd suhnrissions at the tirle ol pclsonal hcaring. ortlcr in original: agr!'cnrcnt copies ctc. I6. Appellant contended that IIRCs have been issucd lirr N4/s. ('omrn Scope [ndia Privatc Limited. (ioa r.r,hich is an establishrncnt ol'distinct person untlcr GS-f and not by the applicant ol the refund clain i.c. N4,'s. C'ornnrscope Intlia Pvt. [,td, Block-1, Floor-2.4. t\{1, l1orne llub. Ilitech Ciity. Madhapur. ]lydcrabacl. Telangana--i0O0ti l. All invoices enclosed to the rcftrnd application havc bccn raiscd by Hyderabad ot)icc. BllCs do not carrv details of thc invoices eithcr. In vicw ol-the abovc. ir is evident tliat thc tax paycr have not rcceired an1, inuard foreign remittance during the rclevant pcritrd. and hence, the total zero rated suppll, ol sen'iccs lbr the clairn period is 'NIL' and Adjusted total tumo\'el is also'NIl,'.

17. As per section l5(5) of thc CGST Act 201 7 "Il1rcra a pcrsrnt xho has ohtained or i.s required lo ohluin rcgistralion in o ,Slate or Union tcrrilorv itt 10 E* \ -.--t hLrs tt \/)t -t .tt tut t\l ]l)li.rlt k'nl, hu.s urt tslttltlislrt't' t t itt Lt:)t)i iL) .\/rtlr' ()t l ttiott lt'rrilt)r\'. tllL'n ' tlt t \ttti !i'lttlL'nts 'ltttll bt' lr(ul(d \ (.\tol)li.\'ll1r!t)l\ (ll il,\/i , i /,('/ !.r/r\ liJr th( t))u.ft).\.(s rtl tlti.t .11t ( i,rr .rr:,1 ll\(l!'rirl)ilrl Llr)il: ilre Llirlinct Persrrrtr lirr iirc :.rl.L' r,l (iSI .\et i)ut r)(rl l()r olhc| Ia\s. lll.l(. .rrc n:ritr ri rL ri itir lrn rrice:. l lrercli,rc lrpf il ,r rt-s L(,ni li(,n tl[rl i:ttrarr] li,rti!.rt t'ctnittencc rlttri: - lhe r.le. llt pcriocl rrlc ril. rrnd lttnce. thc 1()1ll ,/e'o rirtc(l \upl l\ ()l- ser\ic('s l{)r lltc elrrinr pcriotl is -\ll \.li r:teLI t()till [umo\cl is llso -Nl[.'. i\ nol . ,' 'r. I'le:rn,l li.rl'1.'l(rr r'.:.Ll rln l{.lirnti .\ppellant conlintlcd thlt \:inrli()ninS \utlrrrrilr \\ith()rrt c\aminin! thr r-iti.rc ol- >.rir... PIilcc ()l- nr'()\ isi(l ol sat\icL- entl rri rout c\arninilllr th.' irpplicabilrtr ol- srrh-scction (l I t() (I--l ) (\1'Sacli()n I I ol lntL'gralc(l ( iootls & Services I ir\ /\ct. -l()l l- ioncludcil that thc plrrcc o1' pror ision or'srrvicc i. r' rt.irlc ol'Inrliu enrl tltc sLrl.rplr ol'se-rr ice i. c\. rort. ',i lr clr is ll()l c()1fcct. 1 9. [tespondent has sLrbmitted agrecr]rcllt ;op) . inc,rr-polation ccrtificatc ol- thc lcsponderrt ar rr:lI as ser,ice rccipient. ltespondertt lras also subn)ittc(l thc r)arlc cllangc ccrl.itlcates lbr both thc conrpanics. l(). Il is rrbscn crl lhrnr tlrc- srrvicc il,tr!',-' nent ,hrt - (i,nrrrscope -l ccltnrrlirrics LI-( is rlistrbrrl ,r ol- r-l( c(iulnluoicaliolr products .,\ntl thtY clcsirc lrr rrlrtairr r)1,) nalion tccjrn0logt scrVices 1() srr;.r1t,rr1 lltcir ru: inesi ope'rati()ns. Iicspotldent has tlre lt('ctrisar\ ras rrrces 1o pror itle :uelt scr\ iccs- [ It-.r ltar c .,trl,rrilted lrlrlitiorral d().unlcr)ts abopg 1l1L' ...11ic,.\ I I 11 '.,.1 provided. I lou'ever lionr the iuroices and agreement proviclcd it is cvidcnt that rcspondcnt is rvorking as irrtcnnedirtrr an ag(r)t ol'tlrc serr ice recipicrt. IL. It is r'r it['nt lltc scLrp.',ri seniccs claLrse ol' .rq|celr(n1. r'csP0ntlent i.-' lrrrrridin" intcl'l)rc(li.rr\ \cr\ica5 in Lcrnrs r)l scttiorr l( Il) ol thc l(iS I \ct l0l7 Herrct tlrc place i)l l)rr)\i:i()r) ol'scrr icc is ll.lirr i.!'. locirl;on o1- scrrite ploridt-r in lcrnrs ol'scctiorl I i1ii11lr1r,l rlrr. l( i\ I \.r l(rl -. ,ll. Rcl'Lrnrl srnetionirrrr urrthorilr has crrcd in elessil-rirrg tlrc scrrice ls .\l)ort ol senice sillttrut trantinirrg lrirtrrrc ol sclricc. plrtcc- of pror,isiort ol- \er\iea iul!i \\itlr()rrl L'\anlining tltc' applicarbilitr ol' :uh-scction (l) to (ll) of Sccliorr l-3 ol' lntcgratc'cl (iorrcls & Scniccs Iil\ .Act. 1017. 'l'herelbrc suppll .locs not qrralil,r as c\l)ort an(l rclirnd is err()neous. I l. [n \ ie\\ irf tlre ahovc tindings ancl discussi()ll. I Pirss thc lirllorr int ortlcr': 0rdcr I allorr llre appcal lrlcLl br thc dcpartrnent by s(rttir)il rrsiclc thc ortler- ol' reliLrrd saucti()ilirrg authority." 'I'he clcpartn.rcntal appcal \\as prclirrcd on the follou,ins tu o qucstions. "\1/hcthcr tlrc ordcr of (hc Ilefirnd Sanctioning Authoritv in srnctioning refund of Rs. t,"l-1,97,841I 72 '] t Without I)r'oprr dctcrnrinirlion of "'l trrnrn'cr of 7.r:t'o l{atcd Srrpplr ol' scrricrs" as stipulatcd in Ilule ll9({t(l)) of Ccntral ()oods rtntl Senices 'lar I{ulcs, 2017 and ".\d juslcd 'l otal 'l urnor cr'' :rs stiprrhted in I{ule 89({)(l,l) ol' ( rntral (iootls and Serricrs Iur llulcs,2{)17: rrird \\'ithout l)roprr vcrilication tlf agrccmcnts to itsccrl:lin tlrc naturc of scrviccs and l'hcc of provision of'scrr ice as to 11'helhcr (hr\ constitute "crport of scrticts" as pcr Scrtion 2(6) of thc Intcgra(cd (ioods & Scniccs Ia\ \ct, l\

2017. is legal and propcr'?" Thc appellate authorit)' has rc'iectccl the corltcrrtion o{' the departlncnt lhal irrrvard lbreien rcrniltance dtrrinr'. thc relc'r'ant period uere rril and hencc, thc zero ratcd sLlplll\'()l'scrvices for the clainr llct iod were nil ancl that thc Ad.jrrstcd l'otal '[ urrtovcr is also nil as per the findings at para l7 ol'thc intllugncd order. 1'he appellate authority also held that tlre contcntion of the appcllant thi:t thc Rctuncl Sanctionins ALrtltolitr had u,ithout r)xaminir-lg tlre nature of serrricc, l)[acc ol provisi()lt of- sen,ices and without e\antining the applicability' of sub-st:ctions (3) t() ( l3) o1' Section 13 of thc Act, concluclccl tllat the placc o1' 13 provisiorl ol- servicc is outsiile lndia and the strpply ol servicc is cxport is not colrect. It is llrthcl eviclenl thal thc petitiorrcr harl subrnittcd agrct-nrent cop-r, its irrcorporation certiflcatc as uell as service rccipicnt ancl also the rraure change certificatc lbr both the conrpanics. IIon'e-r'cr, the concluding para!.raphs 20,21 and 22 cluoted above do not sho\\'an\/ scl'tlt'ttl Lll' anal_r,sis ol'the ckrcunrents sLrbmittecl bv thc pc-tilioncr to rcach a conclusion that thc Rclirrrd Sanctioning Authority had witlrout exarninirrg thc applicabilitv of sub-qections (3) to (13) o1- Section Ii ol' I(iS I' Act lielc] that the strpply does ttot clualily as cxport and tlre rclirrrd is crroncoLrs. It is trite that the appellatc authoritv docs not have thc powcr o{'remand undcr Section 107(l l) oICGS'I' Act. The appellate authority ought to have cxarnined thc docunrents to conle to an independcnt finding on thc issuc u'hcther tl-re pctitioner's scrvices wcrc iu the nature ol intcrmecliary or qualili, as export of scrvice in ternrs of sulr-sections (i) to (13) o1'Section 13 of IGST Act r,vhicli he liriled to do. 74 I. Lcarnerl counsel fbr the pctitioner has clrrrirr,, thc course of sLrbrnissiorrs. pointcd out that on account ol passine ol thc inrpugncd or cle r'. the- relirrrd clainrs ol tlrc p,:titioncr li'rr strbscquent periods such as fhm Octobcr'. l0ll. to Nlarch, 202i and lionr April. 2023 to N4arch. 102-1. lrave also hccn rejected bv thc Rcfirnd Sanctioninq Ar"rthorilr rvitht.rut cltrc scrutiny or application ol-mind. Thcrclbrc'. it is iLll thc nrore reason Ibr tlrc petitioncr to contcst thc fintlinus. Lcarned counscl lbr tlrc petitioncr has also subnrittcd tlrirt il' thc ntalter is rcrnanded Lo thc appellatc autlroritv and arr o;'l.rolturrit_r IS given 1.o the petitioner, thcy u'ould satisfy thll t[.re se-rvices rendcrccl bv thcnr quality as export sr-rviccs as leiltrired unclcr Sectiorr ll of I(iST Act.

8. Havirrg rcgard to the discussion maclc her.e inabovc alrd the reasons rccorded, we are satislrcd that the inrllugnecl ordc-r suffers frorn non-application ol nrirrd or n()n--ecol'dinq o1- adequate reasons before setting aside the rclirnd sanction order, by th,: appellate atrthctrily. 'l'heretore, tli,-- irtrpuencd ordcl is set aside. Thc mattcr is rernancled trr I lte appcllate a r5 authorit)' l.o pass a fiesh order in accordauce rvith lari :rftcr duc notice to thc petitioner. Lcr thc petitioner appears [.rclbre the rppcllatc arrllroritr on 27. I 0.101-5 Accordingll . tllt: illstrrnr \\'rit l,erition is alloucd. 'l'hcrc shall be no order as to costs Miscellarreous apltlications, il' anr ltending, shall stand c losccl. To, SD/. A. S. GOWRI SHANKAR q ISTANT REGISTRAR ,TRUE COPY' \ ECTION OFFICER 1 . The Additional Commissioner (Appeals-l). GST and GST Bhavan, LB Stadium Road, Basheerbagh, Hyderabad 500004 2. The Deputy/Assistant Commissioner of Central Tax, Gachibowli Division, Rangareddy GST Commissionerate. 1-g\l7l43, VIP Hills, Jai Hind Colony, Madhapur, Hyderabad-50008 1

3. The Commissioner of Central Tax, Rangareddy GST Commrssionerate, 1- ntral Tax, 7th Floor, 9817143, VIP Hills, Jai Hind Colony, Madhapur, Hyderabad-500081 4. The Union of lndia, Through the Secretary to Government, Ministry of Finance, North Block, New Delhi 1 1 0001

5. One CC to SRl. LAKSHIVI KUN/ARAN SRIDHARAN Advocate [OPUC] 6. One CC to Smt. B SAPNA REDDY, SC FOR INCOIVE TAX IOPUC] 7. One CC to DY.SOLICITOR GENERAL OF INDIAOPUCI 8. Two CD Cooies BM ,-! LS w- HIGH COURT DATED:1 511012025 ORDER WP.No.3516 c,f 2024 R 1HE S 14 I c '^1 0 6 llotl 26p l(' ''' ,/ Fi 1g HEO ALLOWING THE WRIT PETITION WITHOUT COSTS U9 kJ 5 Irtlu-