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TMI Blog2025 (5) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... onsent of the learned advocates for the respective parties, the matter is taken up for hearing. 3. The brief facts of the case are as follows: 3.1 The Petitioner is a company engaged, inter alia, in the business of manufacturing and supplying various categories of yarns. The Petitioner is a registered Assessee under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the CGST Act") and falls under the jurisdiction of the GST authorities of Bharuch Division, Vadodara-II Commissionerate. 3.2 The Petitioner avers that in the course of its manufacturing activity, it procures various inputs and raw materials, including Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG), both of which are essential for the production of textile yarns. The Petitioner has also availed various input services. It is stated that all such inputs and input services were subjected to GST at the time of procurement, and hence, in accordance with the scheme laid down under Section 16 of the CGST Act, the Petitioner has been availing Input Tax Credit (ITC) on the tax paid. 3.3 The record indicates that while the inputs procured, such as PTA and MEG, are taxed at the rate of 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner justified the said exclusion on the ground that the judgment rendered by this Hon'ble Court in VKC Footsteps India Pvt. Ltd. v. Union of India had not been accepted by the Union of India and was under challenge before the Hon'ble Supreme Court. Accordingly, in the exercise of quasi-judicial discretion and in view of the pendency of the appeal, the authority restricted "Net ITC" to ITC availed on inputs alone, thereby excluding input services for purposes of the formula under Rule 89 (5). 3.8 Aggrieved by the reduction of refund amounts, the Petitioner preferred the appeals before the Additional Commissioner (Respondent No. 2), who is the designated Appellate Authority under Section 107 of the CGST Act. 3.9. The appeals concerning refund orders for February and March 2021 were registered as Appeal Nos. APL/01/146-147/2021-22, both instituted on 07.06.2021. Further appeals against eight refund orders for Financial Year 2021-22 were registered as Appeal Nos. APL- 01/57 to 64/2022-23. In all these appeals, the Petitioner raised several grounds and reiterated its claim for inclusion of ITC on input services within the scope of "Net ITC" for the purpose of computing refund under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at Annexure-"B" to this petition have been lodged by the Petitioner; (B) That Your Lordships may be pleased to issue a Writ of Mandamus, or any other appropriate writ, order or direction, directing the Assistant Commissioner of CGST, Bharuch (Respondent No.3 herein) to pay in the Petitioner's favour statutory interest under Section 56 of the CGST Act. 2017 for the refund claims referred to in Annexure-"B" to this petition for the period commencing 60 days after date of each of the refund applications till actual payment of the amount of refund pursuant to such refund applications; (C) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to direct the Assistant Commissioner of CGST, Bharuch (Respondent No.3 herein) to determine and quantify refund amount in accordance with the modified formula of Rule 89 (5) of the CGST Rules, for which refund applications detailed at Annexure-"B" to the petition have been lodged, and to pay such refund in favour of the Petitioner on terms and conditions that may be deemed fit by this Hon'ble Court; (D) An ex-parte ad-interim relief in terms of Para 22(C) above may kindly be granted; (E) Any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttained finality. For this reason, the Petitioners cannot reopen an issue which has been closed in the case of the Petitioners merely because a subsequent decision of this Court has expounded a principle of law which benefits them. 6. DISCUSSION & FINDINGS :- 6.1 In view of the submissions of the respective parties, the issue which calls for determination by this Court is whether the benefit of the Notification No. 05.07.2022 vide Circular No. 14/2022 can be extended to refund claims which were decided on the basis of the old formula of inverted duty structure in Rule 89 (5) of the CGST Rules, 2017? 6.2 As held in Ascent and Tirth Agro (Supra) the Notification No. 14/2022 has been held to be clarificatory. This Court, in Ascent (Supra) has held as under :- "41. Having heard learned advocates for the respective parties and having considered the facts of the case and comparing the amendment with the unamended Rule 89 (5), it is clear that for the inverted rated supply of goods and service instead of "the adjusted total turnover" the words "ITC availed on inputs and input services" has been substituted. Thus, the "adjusted total turnover" which is defined in sub-clause (b) as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation. A proviso which is inserted to remedy unintended consequences and to made the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. Xxxx 14. This view has been accepted by a number of High Court. In the case of Commissioner of Income-Tax v. Chandulal Venichand ([1994] 209 ITR 7), the Gujarat High Court has held that he first proviso to section 43B is retrospective and sales-tax for the last quarter paid before the filing of the return for the assessment year is deductable. This decision deals with assessment year 1984-85. The Calcutta High Court in the case of Commissioner of Income-tax v. Sri Jagannath Steel Corporation ([1991] 191 ITR 676), has taken a similar view holding that the statutory liability for sales-tax actually discharge after the expiry of accounting year in compliance with the relevant stature is entitled to deduction under Section 43B. The High Court has held the amendment to be clarificatory and, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refund as per the provision of 54 (3) of the Act only because the petitioner has been granted the refund prior to 05.07.2022 as it would create a discrimination resulting into inequality between the assesses who have been granted refund prior to 05.07.2022 and the assesses who have applied for refund after 05.07.2022. The impugned circular is therefore contrary to the provisions of the Act as it cannot be said that the refund applications filed after 05.07.2022 would only be entitled to the benefit of the amended Rule 89 (5) of the Act. As per the provisions of section 54 (1) read with section 54 (3) of the Act if the assessee has made refund application within the prescribed period of two years, then the assessee would be entitled to the refund as per the amended formula which has been notified w.e.f. 05.07.2022. In the facts of the case the petitioner has made rectification applications for refund as per new amended formula within two years. Moreover, as held by this Court in the decisions in case of Shree Renuka Sugars Ltd (supra) and in case of Pee Gee Fabrics Ltd (supra), there is no embargo on preferring second refund application if the petitioner is entitled to the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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