Super Wave Technology Private Limited Vs Assistant Commissioner of Central Tax (Karnataka High Court)
Summary: The Karnataka High Court disposed of a petition by Super Wave Technology Private Limited concerning a refund claim linked to transitional credit and related interest proceedings. The company, engaged in developing fracking technology, imported a CT Compact 450 size X Ray inspection system from Germany in June 2017. It stated that customs duty could not be paid until the Atomic Energy Regulatory Board issued a No-Objection Certificate on 11 September 2017. Following the introduction of GST on 1 July 2017, the petitioner claimed that Central GST authorities advised it to avail the credit through Form GSTR-3B. Its entitlement was questioned in 2023, resulting in reversal and separate refund and interest proceedings. The refund application led to a communication dated 20 May 2025 referring to State GST jurisdiction and the period during which the portal permitted TRAN-1 applications. The subsequent appeal was treated as invalid because the communication did not constitute a decision on the refund request.
The Court held that the Central Tax authorities had not examined the claim and directed consideration of the petitioner’s peculiar facts and applicable law, including its assertions concerning availment and reversal of credit. It found that the interest demand could not be sustained while that examination remained pending. The petitioner was permitted to submit a certified copy of the order to the second respondent within three weeks of receiving it for determination of refund entitlement based on transitional credit. The appellate order and its summary dated 5 January 2026, and the endorsement dated 7 January 2026, were quashed; the supplied text also refers to commencement of proceedings after the refund decision.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner is a Private Limited Company engaged in developing “fracking ” technology, and in June 2017, the petitioner has imported “ CT Compact 450 size X Ray inspection system ” from Germany. The petitioner could not offer th e customs duty because it had to obtain a ‘No-Objection Certificate ’ from the Atomic Energy Regulatory Board, Government of India, and this No-Objection is issued only on 11.09.2017. The petitioner in the circumstances, and with the GST Regime with effect from 01.07.2017, asserts that it was entitled to a transitional credit but was advised by the Central GST Authorities to file a declaration in Form GSTR-3B to avail such benefit.
2. The petitioner’s further case is that in terms of the advice, it has availed ITC and filed GSTR-3B declaration only to be told in the year 2023 that it would not be entitled to ITC based on the afore import. This has led to tw o proceedings. One with the Central Authorities for refund of the excess duty and the other with the State Authorities claiming interest because of the availment of ITC in filing declaration in Form GSTR-3B.
3. Mr. K. S. Naveen Kumar, the learned counsel for the petitioner, submits [a] that with the State Authorities insisting upon reversal, and the entries being reversed, the petitioner has filed an application with the second respondent for refund, only to be issued with Annexure – L that is dated 20.05.2025 informing the petitioner that the claim falls under the jurisdiction of the State GST Authorities, [b] that GST common portal for filing TRAN-1 application between 01.10.2022 and 30.11.2022 is opened, [c] that the petitioner being aggrieved by this information as against a decision on refund, has filed an appeal with the third respondent only to be issued with Annexure – N which is dated 12.09.2025, and [d] that the petitioner’s appeal is taken as an invalid appeal only because Communication [Annexure – L] is referred and not a decision.
4. These are the submissions are as regards the petitioner’s grievance with the outcome on the application for refund, an d insofar as the State Authorities’ insistence for interest, Mr. Naveen Kumar submits that it is on the advice of the Central Authorities that the petitioner had filed a declaration in Form GSTR-3B and claimed ITC and that the petitioner cannot be called upon to pay interest until the petitioner’s case is completely examined by the Central Authorities.
5. Mr. Jeevan J Neeralagi a learned Standing counsel for the first to fourth and the seventh respondents, and Ms. Malavika Prasad, a learned High Court Government Pleader who accepts notice for the fifth and the sixth respondents, are heard on the circumstances in which there could be interference in the present petition. The first overwhelming fact is that the petitioner’s claim for refund has not been considered by the Central Tax Authorities.
6. This stands out because the application has resulted in the Communication dated 20.05.2025 informing the petitioner that the GST Portal for filing TRAN-1 application was open for a particular period and that the jurisdiction is with the State GST Authorities. The appeal is disposed of opining that there is no decision on th e petitioner’s request for refund and that a decision is a condition precedent to
7. This Court is of the opinion that this outcome does not decide on the petitioner’s claim for refund and such claim must be examined in the light of the facts set out as peculiar to the petitioner and the law that would be applicable. This offers the first reason for interference. The petitioner asserts that it has filed returns in Form GSTR-3B claiming ITC, including the customs duty, only because the State Authorities did not accept it after some lapse of time, the ITC is reversed. Whether this indeed is a fact must also be examined as pa rt of the first aspect and when that is being examined, the demand for interest cannot be sustained. Therefore, the following.
ORDER
A. The petition stands disposed of reserving liberty to the petitioner to file a certified copy of this order along second respondent within three [3] weeks from the date of receipt of a certified copy of this order calling upon the second respondent to examine the peculiarities relied upon by the petitioner and decide on whether the petitioner must be admitted to any refund because it would have been entitled to transitional credit.
B. The Order dated 05.01.2026 passed by the Joint Commissioner of Commercial Taxes (Appeals)-9, Koramangala, Bengaluru [ Annexure – R] and the Summary thereof of the even date [Annexure – R1] as also the Endorsement dated 07.01.2026 [Annexure – S] are quashed but Authorities to commence proceedings once there is a decision by the second respondent on the petitioner’s entitlement to refund based on transitional credit as asserted.
