Section 54 of the CGST Act, 2017— Refund -– The petitioner, a SEZ unit filed refund application on 28.9.2020 in relation to unutilized ITC. The respondent on 23.11.2020, rejected the refund claim of the petitioner and his appeal was also rejected. Provisional Refund Order was issued for another refund application. Another SCN was issued on 28.4.2022 on the ground that the Provisional Refund Order was erroneously granted. The counsel for the petitioner submitted that there is no express denial of refund of output tax or ITC to a SEZ under Section 54. Therefore, the averment that since the supply to SEZ unit is a zero rated, the units situated in SEZ are not eligible for refund under Section 54 of the Act is not sustainable. The court relied upon the judgment in the matter of M/s IPCA Laboratories versus Commissioner and observed that decision covers this issue.

Held that:- The Hon’ble High Court quashed 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 weeks.