Kush Proteins Pvt. Ltd. & Anr. Vs Union of India & Ors. (Gujarat High Court)
Refund of Accumulated ITC on Inverted Duty Structure Cannot Be Denied Based on Filing Date; Circulars cannot override the statute or restrict statutory rights retrospectively: Gujarat High Court
This case analysis concerns M/s Kush Proteins Pvt. Ltd. & Anr. v. Union of India & Ors., decided by the High Court of Gujarat on July 18, 2025.
Background and Facts:
M/s Kush Proteins Pvt. Ltd. (the petitioners) are engaged in the manufacturing and trading of edible oils, cattle feed, palmolein oil, and mustard oil, which fall under Chapter-15 of the Customs Tariff Act, 1975 and attract a 5% GST rate. The petitioners’ raw materials attract a higher tax rate, leading to an accumulation of Input Tax Credit (ITC) due to an inverted duty structure. Under Section 54(3) of the CGST Act, the petitioners are eligible for a refund of this accumulated ITC.
Initially, Notification No. 5/2017 dated June 28, 2017, restricted refunds of unutilized ITC for certain goods, but the petitioners’ products were not listed. However, Notification No. 9/2022 dated July 13, 2022, effective from July 18, 2022, subsequently notified the petitioners’ products as ineligible for accumulated ITC refund.
