Atul Limited & Anr. Vs Union of India & Ors. (Gujarat High Court)
Material Facts
The petitioner, a public limited company engaged in the manufacture and sale of chemical products, supplied goods to Special Economic Zone (SEZ) units and exported goods outside India. For manufacturing its finished products, it purchased coal and generated electricity through its captive power plant. Compensation Cess was paid on the coal, and corresponding input tax credit was availed. During FY 2019-20, the petitioner accumulated Compensation Cess input tax credit of ₹13,46,38,852 on coal purchases and sought refund of ₹3,39,02,063 attributable to zero-rated supplies made on payment of IGST but without payment of Compensation Cess. The refund application was filed under Section 11 of the Goods and Services Tax (Compensation to States) Act, 2017, read with Section 16(3) of the IGST Act, Section 54(3) of the CGST Act and Rule 89(4) of the CGST Rules.
Procedural History
The Assistant Commissioner issued a show cause notice proposing rejection of the refund claim on the ground that refund of accumulated Compensation Cess was available only where zero-rated supplies were made without payment of IGST. The refund was rejected by order dated 08.04.2021 in Form RFD-06. The petitioner’s appeal under Section 107(1) of the CGST Act was dismissed on 19.05.2022. The petitioner challenged the show cause notice, refund rejection order, appellate order and the relevant portions of Circular No. 45/19/2018-GST dated 30.05.2018 and Circular No. 125/44/2019-GST dated 18th November 2019 before the High Court.
