Union of India & Ors. Vs Tirth Agro Technology Pvt. Ltd. & Ors. (Supreme Court of India)
Summary: The Supreme Court of India has dismissed a Special Leave Petition filed by the Union of India against Tirth Agro Technology Pvt. Ltd., thereby upholding the Gujarat High Court’s decision to grant a refund based on the retrospectively applied amended formula of Rule 89(5) of the CGST Rules. Tirth Agro had sought a refund of differential Input Tax Credit (ITC) under the inverted duty structure. The original formula, which excluded input services, resulted in partial refunds for claims filed before July 5, 2022. However, the rule was amended and clarified by a CBIC Circular dated November 10, 2022, to include input services in the refund calculation. When Tirth Agro filed rectification applications based on this amendment, they were rejected by the department, which argued the old formula governed pre-amendment claims.
The Gujarat High Court, relying on its prior ruling in the Ascent Meditech Ltd. case, determined that the amendment to Rule 89(5) and the corresponding circular were clarificatory and curative, making them applicable retrospectively. The Supreme Court’s decision to dismiss the Revenue’s SLP was influenced by the fact that the appeal against the Ascent Meditech Ltd. judgment had already been dismissed by the Supreme Court on March 28, 2025, a fact not disclosed by the petitioners. This dismissal reinforces the judicial position that the revised formula for Inverted Duty Structure (IDS) refunds should apply to all refund or rectification applications filed within the two-year limitation period prescribed under Section 54 of the CGST Act, regardless of whether the initial claim was made before the amendment’s effective date of July 5, 2022.
