Zoetis Pharmaceutical Research Pvt. Ltd. Vs State of Maharashtra (Bombay High Court)
In this case, the petitioner challenged an order rejecting its refund claim of unutilized Input Tax Credit (ITC) for the period October 2022 to March 2023, along with a subsequent corrigendum and show cause notices issued for earlier financial years. The petitioner, engaged in providing research and development services to overseas group entities under a research and development agreement, contended that its services constituted zero-rated supplies and that refund claims for earlier periods from July 2017 to September 2022 had already been sanctioned.
The petitioner filed a refund application for the period October 2022 to March 2023, which was followed by a show cause notice alleging that the petitioner acted as an agent of its overseas group entity. The petitioner replied that it was not an agent and that the allegations were vague. It also relied on a GST circular clarifying that separately incorporated entities cannot be treated as establishments of a distinct person. Additional submissions were made to support its position. Despite these submissions, the refund application was rejected through an order dated 11 December 2023. Subsequently, a corrigendum dated 22 December 2023 introduced a new ground by stating that the petitioner’s services were exempt under GST laws. According to the petitioner, this ground had never been raised in the original show cause notice.
