McKinsey Global Services India Pvt. Ltd. Vs Joint Commissioner (Madras High Court)
Summary: Madras High Court considered a writ petition filed by M/s. McKinsey Global Services India Pvt. Ltd., an SEZ Unit, challenging the order-in-original dated 09.11.2023 and appellate order dated 13.02.2024 concerning its refund claim. The impugned order proceeded on the basis that Section 54 of the CGST Act, 2017, Section 16 of the IGST Act, 2017 and Rule 89 of the CGST Rules, 2017 permitted only suppliers supplying goods or services to SEZ units to claim refund and that there was no enabling provision permitting an SEZ unit itself to claim refund of unutilized credit.
The petitioner relied on Platinum Holdings Private Limited v. Additional Commissioner of GST & Central Excise, 2021 (47) GSTL 30 (Mad.), wherein the Madras High Court had held that Rule 89(1) does not restrict refund applications only to suppliers to an SEZ and applies to any entity. The Court had held that the reference to a supplier in the second proviso does not exclude other applicants and that no restriction can be inserted into a statutory provision or rule by interpretation. The petitioner also relied upon Urjita Electronics Pvt. Ltd. v. Joint Commissioner GST & CE, 2025 (29) Centax 360 (Madras High Court), which reiterated the same position.
The High Court found no reason to deviate from the reasoning in Platinum Holdings and Urjita Electronics. Consequently, the impugned order was set aside and the respondents were directed to process the petitioner’s refund application in accordance with the judgments cited in the order. The process was directed to be completed within two months from receipt of a copy of the order. Accordingly, the writ petition was allowed, the connected miscellaneous petition was closed and no costs were imposed.
Cases Discussed
- Platinum Holdings Private Limited v. Additional Commissioner of GST & Central Excise, 2021 (47) GSTL 30 (Madras High Court) — Relied upon and followed; the Court reproduced the material reasoning that Rule 89(1) does not restrict refund applications only to suppliers to SEZ units and that such a restriction cannot be read into Section 54 and Rule 89.
- Urjita Electronics Pvt. Ltd. v. Joint Commissioner GST & CE, 2025 (29) Centax 360 (Madras High Court) — Relied upon as a subsequent judgment reiterating the position adopted in Platinum Holdings; the Court saw no reason to deviate from the reasoning in these decisions.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner is a SEZ Unit. Order-in-original dated 09.11.2023 and appellate order dated 13.02.2024 are challenged in this writ petition.
2. Relying on the judgment of this Court in Platinum Holdings Private Limited v. Additional Commissioner of GST & Central Excise, 2021 (47) GSTL 30 (Mad.) (Platinum Holdings), it is contended on behalf of the petitioner that the issue raised in this writ petition is squarely covered by the judgment of this Court. Reliance is placed on paragraph-16 of the judgment. In addition, referring to the judgment in Urjita Electronics Pvt. Ltd. v. Joint Commissioner GST & CE, 2025 (29) Centax 360 (Urjita Electronics), it is submitted that the same position was adopted in this later judgment. Therefore, learned counsel submits that the writ petition is liable to be allowed.
3. In response, Mr.Meganathan, learned standing counsel for the respondents submits that a writ appeal was filed against the judgment in Platinum Holdings. He admits that no interim order was obtained therein.
4. The issue that arose for consideration in the impugned order is evident from paragraph 5.8 thereof. Said paragraph reads as under:
“5.8 Section 16 of the IGST Act, 2017, Section 54 of the CGST Act, 2017 and Rule 89 of CGST Rules, 2017 in conjunction stipulates that only suppliers supplying goods and/or services to SEZ units are eligible to claim refund, if they opt to make such supplies on payment of tax. There is no discord between the CGST Act, IGST Act or the Rules. All three clearly state that suppliers supplying goods and/or services to SEZ shall supply for refund of un-utilized credit. Thus, there is no enabling provision for the SEZ unit to claim refund of un-utilized credit in the GST legislation.”
5. In Platinum Holdings, the same issue arose for consideration. Relevant paragraphs 6, 16 and 17 are set out below:
“6. The issue for resolution has been crystalized at para 5 of the impugned order as to ‘whether a SEZ unit is eligible to claim refund of unutilized Input Tax Credit (ITC)’. The authority refers to the provisions of Section 54 of the CGST Act dealing with applications for refund and Rule 89(1) of the Central Goods and Services Tax Rules, 2017 (CGST Rules) under Chapter X thereof, which deal with the procedure for disposal of applications seeking refund of tax, interest, penalty fees or other amounts.
….
16. Learned Senior Standing Counsel has taken me through Rule 89, particularly, the second proviso thereto, as sell as Clause (f) of sub-rule 2, which refer to an application filed by a supplier to a SEZ. This, according to her, would indicate that an application for refund should only be filed by a supplier. I do not agree for the reason that Rule 89(1) does not envisage any such restriction and, in my view, applies to any entity. No doubt, the second proviso refers to a supplier of an SEZ, which is only one kind of entity that may make an application under Rule 89. This is not to say that the reference to a supplier, will exclude, by virtue of such reference, other applicants.
17. Thus, on a combined reading of Section 54 and Rule 89, the restriction which has been read into the provision by the Revenue is, in my view, misplaced. In fact, the Officer in the impugned order proceeds on the basis that the second proviso to Rule 89 deploys the word ‘only’, which I do not find in the second proviso. It is a settled position that there can be no insertion of a word or phrase in a statutory provision or in a Rule which must be read and applied, as framed . No restrictions or amplifications of the Rule are permissible by interpretation. On the legal issue of entitlement to refund, I hold in favour of the petitioner.”
6. The subsequent judgment of this Court in Urjita Electronics reiterates the same position. I see no reason to deviate from the reasoning in those decisions. Consequently, the impugned order is set aside and the respondents are directed to process the refund application in accordance with this and other judgments cited herein. This process shall be completed within two months from the date of receipt of a copy of this order
7. The writ petition is allowed on the above terms. Consequently, connected miscellaneous petition is closed. No costs.
