Shree Arihant Oil and General Mills Vs Union of India (Rajasthan High Court)
Rajasthan High Court in Shree Arihant Oil and General Mills v. Union of India examined the legality of a restriction placed on refund of Input Tax Credit (ITC) by the Central Board of Indirect Taxes and Customs (CBIC) through Circular No. 181/13/2022-GST dated 10 November 2022. The petitioner, a manufacturer of edible oil, challenged the inaction of the authorities in processing its refund applications for tax periods prior to 18 July 2022.
Facts of the Case
The petitioner purchased mustard oil, classified under HSN 1514, on payment of GST. Since its final products were subject to a lower tax rate, the firm fell under the inverted duty structure and filed refund claims under Section 54 of the Central Goods and Services Tax (CGST) Act, 2017.
On 13 July 2022, Notification No. 09/2022-Central Tax (Rate) was issued, denying refund of unutilised ITC for goods including HSN 1514, effective from 18 July 2022. The petitioner filed refund applications on 4 January 2023 for the period before the notification’s commencement. The applications remained undecided, with authorities relying on the CBIC Circular dated 10 November 2022, which clarified that refund restrictions applied to applications filed on or after 18 July 2022, irrespective of the tax period.
