Shree Proteins Private Limited Vs Union of India & Anr. (Gujarat High Court)
The petitioner, engaged in manufacturing and trading edible oils falling under Chapter 15 of the CGST Act, challenged Circular No. 181/13/2022-GST dated 10.11.2022, rejection orders dated 20.01.2023, 30.01.2023 and 24.02.2023, and sought refund of accumulated Input Tax Credit (ITC) under Section 54(3) of the CGST Act. The petitioner contended that although its outward supplies attracted GST at 5%, its inputs and input services were taxed at higher rates, resulting in an inverted duty structure. The petitioner submitted that its products became ineligible for refund only from 18.07.2022 pursuant to Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022, while accumulated ITC relating to earlier periods remained refundable.
The refund applications for various tax periods from September 2018 to March 2020 were rejected solely on the basis of Circular No. 181/13/2022-GST, which clarified that the restriction introduced by Notification No. 09/2022 would apply to refund applications filed on or after 18.07.2022. The petitioner challenged the validity of the Circular and the rejection orders.
The petitioner relied upon the Gujarat High Court decision in Patanjali Foods Limited Vs. Union of India and others, wherein paragraph 2(2) of Circular No. 181/13/2022-GST had been struck down. The respondent was unable to dispute the applicability of that judgment but submitted that one refund application, relating to September 2018 to November 2018, was barred by limitation.
