Concept of Refund claims – Beyond the Box, basis Principle of Restitution-By J the App

The concept of filing refund claims are carved out as part of the GST legislative ecosystem. What happens in the event of a challenge to a refund claim that emerges from contours not envisaged in law, becomes a matter of concern and more so for the honest tax payer. In a remarkable judgement passed recently, the Hon’ble HC of Gujarat in the case of A.T. Trade Overseas Pvt. Ltd., Versus Union of India, (2025) 27 Centax 189 (Guj.) held that refund claim is maintainable as notifications imposing IGST levy on ocean freight were struck down as unconstitutional. GST is almost 8 years old and there have been culmination of challenges and litigations that have resulted in some of the High Courts, at times, holding a specific provision as unconstitutional. In addition, certain clarifications being made by way of circulars issued by the Central Board of Indirect taxes. This position paper analyses the recent trend of Circulars that is more benevolent in clarifying that GST would not be payable or that a particular activity is not exigible to tax at all while holding that the tax paid however to the Revenue would be treated or dealt with on a “As is basis”.