Refund Claim Filed Post 18.07.2022 Allowed for Period Prior to Notification No. 9/2022

Case Details

• Case Title: M/s Louis Dreyfus Company India Private Limited vs. Union of India & Ors.

• Court: High Court of Gujarat at Ahmedabad

• Petition Number: Special Civil Application No. 8709 of 2023

• Category of Dispute: Refund – Inverted Duty Structure

• Date of Judgment: 02.05.2025

• Relevant Provisions: Section 54(1) & 54(3)(ii) of CGST Act, Rule 89 of CGST Rules, Notification No. 09/2022-Central Tax (Rate), Circular No. 181/13/2022-GST

Facts of the Case (¶3.1–3.7)

• The petitioner is a manufacturer and refiner of oil (Chapter 15 of Customs Tariff), facing an inverted duty structure due to higher tax on inputs and lower tax on output.

• It filed a refund application dated 07.11.2022 for unutilized ITC under Section 54(3)(ii) of CGST Act.

• The refund pertained to the tax periods between July 2019 and February 2020 and was filed within the prescribed limitation period considering Notification No. 13/2022.

• Acknowledgement was granted via GST RFD-02, confirming the application was complete.

• Despite that, a Show Cause Notice was issued and the refund was rejected via order dated 05.01.2023 solely on the ground that the application was filed after 18.07.2022.

• This rejection was based on Circular No. 181/13/2022-GST which was challenged by the petitioner for giving retrospective effect to Notification No. 09/2022.

Questions in Consideration (¶4)

1. Whether refund claims for periods prior to 18.07.2022 can be rejected solely on the basis that the application was filed after 18.07.2022?

2. Whether Circular No. 181/13/2022-GST dated 10.11.2022 can impose retrospective restrictions on refund claims?

3. Whether Circulars can override the CGST Act and Notifications?

Observations of the Court (¶7)

• The Court referred to its earlier decision in Patanjali Foods Ltd. v. Union of India which struck down para 2(2) of Circular No. 181/13/2022-GST.

• It reiterated that refund applications for periods prior to 18.07.2022, even if filed after 18.07.2022, cannot be rejected if filed within the statutory time limit under Section 54.

• The Circular had created two artificial classes based on date of filing, which was held impermissible.

• Court observed that Circulars cannot override statutory provisions or operate retrospectively when the Notification itself is prospective.

Judgement of the Court (¶8)

• The rejection order dated 05.01.2023 was quashed and set aside.

• Respondents were directed to reconsider and decide the refund application afresh within 12 weeks in accordance with law.

• Rule made absolute. No costs awarded.

Between Fine Lines

• Refunds under inverted duty structure for periods before 18.07.2022 cannot be rejected just because the application was filed after that date.

• A circular cannot retrospectively alter the effective date of a notification.

• Statutory provisions under Section 54 override departmental circulars.

• The petitioner’s refund application was timely and must be reassessed afresh.

• This reinforces judicial checks on administrative overreach.

Summary of Referred Cases

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