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2020 ] CIRCULARS CANNOT OVERRIDE RIGHTS VESTED BY THE STATUTE A189

In Pioneer India Electronics (P) Limited v. Union of India and Another - 2014
(301) E.L.T. 59 (Del.) the High Court quashed the impugned circular stipulating
that Section 27 of the Customs Act had no application. The High Court held that
the circulars can supplant but not supplement the law. The circulars might miti-
gate the rigors of law by granting administrative relief beyond relevant provi-
sions of the statute, however, the Central Government is not empowered to
withdraw benefits to impose stricter conditions than stipulated by law.
In Pitambara Books Private Limited v. Union of India - 2020 (34) G.S.T.L. 196
(Del.), the petitioner is engaged in the business of manufacturing and trading of
books. The business involves procuring raw materials and allied goods from the
domestic market for manufacture of final product. Then the same is exported to
markets in foreign countries. The export activity of the petitioner is categorized
as ‘zero-rated supplies’.
In the present writ petition, the petitioner challenges the following circu-
lars -
• No. 37/11/2018-GST, dated 15-3-2018; and
• No. 125/44/2019-GST, dated 18-11-2019.
The first circular was superseded by the second circular. The second cir-
cular deals with fully electronic refund process through FORM GST RFD-01 and
single disbursement. In this circular there is a guideline for refund of unutilized
input tax credit. Para 8 of the said circular provides that the applicant, at his op-
tion, may file a refund claim for a tax period or by clubbing successive tax peri-
ods. The period for which refund claim has been filed, however, cannot spread
across different financial years. Registered persons having aggregate turnover of up
to ` 1.5 crore in the preceding financial year or the current financial year opting
to file FORM GSTR-1 on quarterly basis, can only apply for refund on a quarterly
basis or clubbing successive quarters as aforesaid. However, refund claims under
categories listed at (a), (c) and (e) in para 3 above must be filed by the applicant
chronologically. This means that an applicant, after submitting a refund applica-
tion under any of these categories for a certain period, shall not be subsequently
allowed to file a refund claim under the same category for any previous period.
This principle/limitation, however, shall not apply in cases where a fresh appli-
cation is being filed pursuant to a deficiency memo having been issued earlier.
The petitioner submitted the following before the High Court -
• Section 16(3)(a) provides that a registered person making zero-rated
supply shall be eligible to claim refund by making supply of goods
and services under bond or letter of undertaking subject to such
conditions, safeguards and procedure as may be prescribed, with-
out payment of integrated tax and claim refund of unutilized input
tax credit under Section 54 of CGST Act.
• On a harmonious reading of Section 54(3) and Rule 89(4) it can be
inferred that a person making zero-rated supplies can claim refund
of unutilized input tax credit at the end of any tax period by making
refund application before the expiry of two years from the relevant
date in such form and manner as may be prescribed.
• The first impugned circular provided that the refund period could
not spread across different months. Considering the difficulties
faced by the exporters in refund the Board framed the second im-
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